Ray Promises to Give Steve His IPod in Exchange for Steve's

question 44

Multiple Choice

Ray promises to give Steve his iPod in exchange for Steve's promise to pay Ray $50. Later, they exchange the device for the funds. A contract was created when

• A) ​Ray offered to sell his iPod.
• B) ​Ray exchanged his iPod for $50.
• C) ​Steve promised to pay Ray for the iPod.
• D) ​Steve paid Ray $50 for the iPod.

---

Definitions:

Compounded Semi-annually

A method where interest earnings are calculated and added to an account's balance every six months, contributing to the compounded growth of an investment.

Compounded Quarterly

Related to the calculation of interest which is added to the principal amount at the end of every quarter, or every three months.

Preferred Share

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often receiving dividends before common shareholders.

Discount Rate

The interest rate that the Federal Reserve charges commercial banks for loans, or a rate used in discounted cash flow analysis to determine the present value of future cash flows.