Zen Products, a Lumber Wholesaler, Operates in a State Where

question 5

Multiple Choice

Zen Products, a lumber wholesaler, operates in a state where individual sales are prohibited for wholesalers. If one of the partners sells one sheet of plywood to an individual, the contract is likely to be:

• A)Not binding on the firm.
• B)Binding on the firm.
• C)Enforceable on the selling partner.
• D)Enforceable in a court of law.

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Definitions:

Specific Price

This term refers to the exact price of a particular item or security at a specified time.

Put Option

A put option is a financial contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Call Option

An agreement in finance which allows the purchaser to have the option, but not the commitment, to purchase a certain amount of a specific asset at a pre-agreed price during a fixed period.

Specified Price

A predetermined price set in a contract or agreement, often related to sales or financial instruments.