According to the Objective Theory of Contracts,the Intent to Enter

question 24

Multiple Choice

According to the objective theory of contracts,the intent to enter into a contract is judged by the ________.

• A)doctrine of equity
• B)legality of the contract
• C)reasonable person standard
• D)common law of contracts

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Definitions:

Commitment Fees

Fees charged by lenders to a borrower for an unused or untapped credit line, ensuring the lender retains availability of the funds.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by government bonds.

Compensating Balances

Minimum balance requirements imposed by financial institutions on certain accounts, which borrowers must maintain to compensate for the lower interest rate or fees on loans.

Speculative Opportunities

Investment options that carry a high risk of loss but also offer the potential for high rewards.