Assume the Risk-Free Rate Increases

question 53

Multiple Choice

Assume the risk-free rate increases. This change will ________ the value of call options and ________ the value of put options on shares of stock.

• A) increase; decrease
• B) increase; increase
• C) decrease; decrease
• D) decrease; increase
• E) not affect; not affect

Distinguish between material and immaterial breaches and their implications for contract enforcement.

Recognize the importance of express and implied terms in contract formation and interpretation.

Understand the use of injunctions in enforcing contractual terms.

Learn the doctrine of anticipatory repudiation and its effects on contractual relations.

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Definitions:

After-Acquired Property

Property acquired by a debtor after the security arrangement is made.

Livestock

Domesticated animals raised in an agricultural setting to produce labor and commodities such as meat, eggs, milk, fur, leather, and wool.

Inventory

Consists of the goods and materials held by a business for the purpose of resale or production.

Consumer Good

A product intended for personal use or consumption by the general public.