The Consequences of Forming a Contract That Contravenes the Terms

question 20

Multiple Choice

The consequences of forming a contract that contravenes the terms of a statute:

• A)Are that the parties are penalised.
• B)Are that the contract is invalid.
• C)Are that the parties are penalised and the contract is valid.
• D)Depend upon the wording of the statute.

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Definitions:

Expected Utility

A theory in economics that assesses the utility or satisfaction an agent expects to receive from different outcomes, taking into account their risk preferences.

Less Risk-averse Investors

Less risk-averse investors are those willing to take on greater risks for the potential of higher returns, as opposed to being risk-averse who prefer safer, lower-return investments.

Probability Distribution

A mathematical description of the likelihood of various outcomes from a random event or experiment.

Global Minimum Variance Portfolio

A global minimum variance portfolio is an investment portfolio that is constructed to achieve the lowest possible risk or variance among all possible portfolios of assets.