Gottlieb Owned a Cottage Lot Which Had Frontage on a Lake

question 22

True/False

Gottlieb owned a cottage lot which had frontage on a lake. He later granted a 30-metre wide right of way to Baxter, who had a lot behind his, to enable Baxter to reach the lakeshore to launch his power boat. The next year, Baxter built a boathouse on the 30-metre strip in which to store his boat during the winter months. When Gottlieb discovered the boat house a few months later, he hired a bulldozer, and pushed the boathouse off the land, and into the lake. Baxter was not entitled to build a boathouse on the right of way.

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Definitions:

Spot Rate

The current price in the marketplace at which a given asset—such as a currency, commodity, or security—can be bought or sold for immediate delivery.

Forward Rate

The predetermined price for a transaction that will occur at a specific future date, used in the context of currency and interest rate markets.

Interest Rate Parity

A theory that suggests the difference in interest rates between two countries is equal to the differential between the forward exchange rate and the spot exchange rate.

Nominal Rate

The interest rate before adjustments for inflation; essentially, the face value rate of interest.