Chet Makes a Material Misrepresentation of Fact Regarding His Horse

question 55

Multiple Choice

Chet makes a material misrepresentation of fact regarding his horse to Rosalind while out riding one day. Later that day, Rosalind makes an offer to buy the horse which Chet accepts, without correcting his earlier misrepresentation of fact. In this case:

• A) Chet may avoid the contract.
• B) Rosalind may avoid the contract.
• C) either or both Chet or Rosalind may avoid the contract.
• D) neither Chet nor Rosalind may avoid the contract.

---

Definitions:

Small Stocks

These are shares of companies with a relatively small market capitalization, often considered to be more volatile but potentially offering higher returns compared to larger companies.

Long-Term Bonds

Bonds with a longer maturity period, typically more than 10 years, offering potentially higher yields but increased interest rate risk.

Treasury Bill

A short-term government security issued at a discount from the face value and pays no interest before maturing at its face value.

Effective Annual Rate

The interest rate on a loan or investment, adjusted for the effect of compounding over a one-year period.