Dan, an Agent for Ramona, Sees What He Thinks Is

question 58

Essay

Dan, an agent for Ramona, sees what he thinks is a good deal for Ramona. Without asking whether he has authority to negotiate the deal, Dan enters into a contract on Ramona's behalf. Ramona says later that she isn't interested. Is Ramona liable on the contract? Is Dan liable on the contract? Explain.

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Definitions:

Maturity Risk

The risk associated with the time until the bond or other fixed income instrument pays its principal back. It can affect interest rates and investment value.

Default Risk

The likelihood that a borrower will fail to meet the obligations of paying back debt, impacting the safety of the investment.

Federal Government Debt

The total amount of money that the national government has borrowed through various means, including Treasury bonds, bills, and notes.

Default Risk

The risk associated with a borrower failing to make required payments on debt.