Roberts Has the Chance to Buy Three Adjacent City Lots

question 60

Multiple Choice

Roberts has the chance to buy three adjacent city lots zoned "duplex." The most profitable return would be the building of four townhouses across the three lots, but that would necessitate getting permission from the city for the replotting, which would be a time-consuming process. If Roberts buys a 60-day option from the seller of the properties for $4000, which of the following would be true?

• A) The offer for the properties will expire before the end of the designated 60-day period if another person offers a higher price.
• B) If Roberts does not exercise the option during the option period, she can later force the seller to sell that property to her at that price.
• C) By buying the option, Roberts has bought a period of time during which she must accept the land offer.
• D) If Roberts does not exercise the option, she will get her $4000 back because she didn't get what she was bargaining for.
• E) The seller is bound by contract neither to sell the property to any other party or to revoke the offer within the option period.

---

Definitions:

Open Market Committee

A committee within a central bank, like the Federal Reserve in the United States, that makes key decisions about interest rates and the growth of the United States money supply.

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and management of the country's money supply.

Required Reserves

The minimum amount of reserves a bank is required to hold by central bank regulation, aimed at ensuring the bank's liquidity and stability.

Excess Reserves

The surplus funds that a bank or financial institution possesses beyond the mandatory requirements set by regulatory bodies, creditors, or its own internal governance protocols.