A Customer Requested a Price from a Carpenter on a Teak

question 12

Multiple Choice

A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications. Because teak wood is difficult to obtain, the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it. Which of the following is correct?

• A) Although the price is somewhat unclear, the parties have entered into a contract.
• B) This is an agreement to agree, and is not binding.
• C) This agreement fails for indefiniteness.
• D) The carpenter is bound by the agreement, but not the customer.

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Definitions:

Risk-to-reward Ratio

A measure used by investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Constant

A fixed value that does not change in mathematical equations or in the context of specific calculations.

Security Market Line

A line that represents the relationship between the expected return of a market security and its risk, as measured by beta.

Market Rate

The market rate, often related to interest or exchange rates, is the prevailing rate determined by supply and demand dynamics in the open market.