Ed Signs a Ten-Year Lease with a Survival Clause

question 1

Multiple Choice

Ed signs a ten-year lease with a survival clause. If Ed is evicted after two years, he will have to pay:

• A) rent for the remaining 8 years.
• B) damages equal to the difference between the rent specified in the lease and the rent the landlord is able to obtain from reletting the premises.
• C) until eviction.
• D) until he assigns the lease.

---

Definitions:

Required Return

The minimum expected yield by investors based on the investment’s perceived risk level, influencing investment decisions.

Holding-Period Return

The rate of return over a given period.

Expected Variance

The anticipated value of the squared deviation of a random variable from its mean, used to predict the volatility or risk of financial returns.