An Investor Can Undo the Effect of Leverage on His/her

question 2

Multiple Choice

An investor can undo the effect of leverage on his/her own account by:
I. investing in the equity of a levered firm
II. by borrowing on his/her own account
III. by investing in risk-free debt like T-bills

• A) I only
• B) II only
• C) III only
• D) I and III above

Understand the role and application of the parol evidence rule in contract disputes.

Recognize the exceptions to the statute of frauds and how they affect contract enforceability.

Understand the importance of usage of trade and its impact on contract interpretation and enforcement.

Comprehend the conditions under which oral contracts may be considered enforceable despite the statute of frauds.

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Definitions:

Good

A material item or service that can be bought, sold, or traded to satisfy a want or need.

Opportunity Cost

The value of the next best alternative forgone as the result of making a decision.

Optimum

The most favorable condition or level at which the best possible outcome or maximum efficiency is achieved.

Sweater

A knitted garment typically covering the upper body, designed for warmth or fashion.