Which of the Following Is True of a Warranty of Merchantability

question 3

Multiple Choice

Which of the following is true of a warranty of merchantability?

• A)It imposes the duty to employ a particular design, on the merchant, for safety reasons.
• B)Warranty of merchantability exists even after the risk of loss has passed to the buyer.
• C)Warranty of merchantability relates only to the fitness of the product made or sold.
• D)Unless otherwise excluded or modified, merchants do not make an implied warranty of merchantability.

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Definitions:

Dividend

Funds disbursed by a corporation to its owners, often from the company's profits, as a profit sharing.

Expected Growth Rate

The predicted percentage increase in the value of an investment, asset, or economy over a certain period of time.

Required Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Market Capitalization Rate

The expected rate of return on a portfolio consisting of all publicly traded stocks, used as a measure to value a company's stocks based on the market’s expectations of its future earnings.