Each Party to a Contract Must Give Up Something of Value

question 18

Multiple Choice

Each party to a contract must give up something of value in exchange for something of value, this is known as __________.

• A) meeting of the minds
• B) offer
• C) consideration
• D) communication

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Definitions:

Risk-free Asset

An investment that is expected to deliver guaranteed returns, with minimal to no risk of financial loss.

Arithmetic Average

The simple mean calculated by dividing the sum of a set of numbers by the quantity of numbers in the set.

Geometric Average

A method of calculating the average rate of return that accounts for compounding, often used for investment portfolios.

Long-term

In finance, refers to investments or loans that mature in more than one year; in general use, refers to a duration extending over a long period.