Buck,fearing Death from Severe Injuries Suffered in a Machinery Accident,assigned

question 35

Multiple Choice

Buck,fearing death from severe injuries suffered in a machinery accident,assigned over a certificate of deposit worth $100,000 and delivered the certificate to Pearl,a friend,who gladly accepts.Buck ends up recovering from the injuries.Why must Pearl give the certificate of deposit back to Buck?

• A)This type of gift is known as a gift causa mortis.It is a conditional gift which is conditioned on Buck's actually dying.Because Buck recovered, the gift is automatically revoked.
• B)This is an inter vivos gift because Buck was still alive when the gift was made. Any inter vivos gift is revocable because there is no consideration to make Buck's delivery of the certificate binding under contract law.
• C)This is an inter vivos gift and due to state laws, gifts in contemplation of death must be written into a valid will or otherwise the deceased's assets will be distributed according to state statute.
• D)This gift is an ordinary gift, but it is revocable because we don't know if the certificate of deposit has matured or not.

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Definitions:

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, often represented by the yield on government bonds.

Portfolio Expected Worth

The projected value of a portfolio, considering the potential returns of the investments within it over a specific timeframe.

Alpha

A performance measure indicating the excess return of an investment relative to the return of a benchmark index or risk-free rate.

Risk-Free Rate

The return on an investment with no risk of financial loss, often represented by government bonds.