When Can a Person Who Is Not a Party to a Contract

question 39

Multiple Choice

When can a person who is not a party to a contract enforce the contract?

• A)When they are a beneficiary under an insurance contract.
• B)Any time: contracts can be enforced by anyone.
• C)Never, according to the doctrine of privity of contract.
• D)When they have suffered harm as a result of the breach.

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Definitions:

Expected Returns

The anticipated profit or loss from an investment, based on projections or historical data.

Variances of Returns

A statistical measure of the dispersion of returns for a given security or market index, often used to quantify risk.

Mean-Variance Efficient Portfolio

A portfolio constructed to have the highest possible return for a given level of risk, or equivalently, the lowest risk for a given level of expected return, according to Harry Markowitz's theory.

Firm-Specific Variances

Variability in a firm's stock price or returns that is attributable to factors unique to that firm, as opposed to general market factors.