Kirk Entered into a Contract with Yemmi to Haul Gravel

question 25

True/False

Kirk entered into a contract with Yemmi to haul gravel in his large tandem truck from Yemmi's gravel pit to a building site some five kilometres distant, at $60 per load. Before Kirk was to begin performance, his truck was destroyed in a serious traffic accident. Because Kirk is bound in contract, Yemmi can require Kirk to purchase a new truck to perform the agreement.

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Definitions:

Black-Scholes Value

A model used to estimate the theoretical price of options and certain other financial instruments.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other assets at a specified price within a specific time period.

Volatility

The degree of variation of a trading price series over time, often used to gauge the risk in investments.

Put-call Parity

A principle in options pricing that shows the relationship between European put and call options with the same strike price and expiration date.