Which of the Following Statements Is TRUE

question 47

Multiple Choice

Which of the following statements is TRUE?

• A) Bankruptcy always relieves a contractual party from the need to satisfy a debt that arose under a contract.
• B) The doctrine of frustration applies in favour of the innocent party if the other party to a contract intentionally makes it impossible to perform the contract.
• C) In contrast to the doctrine of promissory estoppel, there is no possibility of retraction and resumption of rights under the doctrine of waiver.
• D) The breach of an intermediate term sometimes allows the innocent party to discharge the contract.
• E) The lapse of time under a statute of limitation causes a contract to be wiped out altogether.

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Definitions:

Strike Price

The set price at which the holder of a financial instrument can buy or sell the underlying asset in options trading.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a particular time period.

Out-Of-The-Money

A term used to describe an option contract that would not result in a profit if exercised at the current market level.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the company's equity, usually at the option of the bondholder.