If a Contract Is Divisible So That the Legal Parts

question 20

Multiple Choice

If a contract is divisible so that the legal parts can be performed separately from the illegal parts, then the legal parts of the contract are:

• A)enforceable .
• B)void .
• C)unconscionable .
• D)quasi-contractual in nature .

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Definitions:

Zero-Coupon Bond

A bond that is issued at a discount and repaid at face value at maturity, without periodic interest payments.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, typically expressed in years.

Coupon

The interest rate on a bond that the issuer promises to pay to the holder until maturity.

Zero-Coupon Bond

A bond that does not pay periodic interest and is sold at a discount from its face value, with the return being the difference between the purchase price and the bond's face value at maturity.