An Agency Relationship May Not Be Created

question 7

Multiple Choice

An agency relationship may not be created

• A) by express contract.
• B) by conduct of the principal and agent.
• C) without the principal's knowledge or con- sent.
• D) by ratification.

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Definitions:

Continuous Compounding

The process whereby interest earned is immediately reinvested to earn more interest, theoretically occurring an infinite number of times per period.

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment, accounting for compounding.

EAR

Effective Annual Rate, the actual return on an investment when compounding interest is taken into account over a one-year period.

Geometric Mean Return

The geometric mean return, for investment performance, is the compound annual growth rate (CAGR) of an investment, calculated by taking the nth root of the total returns, where n represents the number of periods.