While Sitting Beside a Swimming Pool, a Neighbor, Bob, a Roof

question 151

Multiple Choice

While sitting beside a swimming pool, a neighbor, Bob, a roof installer, tells you that you should buy stock in HotNet because it is about to skyrocket in value. You invest all your money in the stock, which then drops to zero. You:

• A) cannot sue Bob for misrepresentation
• B) can sue Bob for negligent misrepresentation, but not for fraud
• C) can sue Bob for deceit, but not for intentional misrepresentation
• D) can sue Bob for negligent misrepresentation, but not for intentional misrepresentation
• E) can sue Bob for fraud, but not for fraudulent misrepresentation

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Definitions:

Rate of Return

The profit or deficit experienced from an investment, represented as a percentage of the investment's starting price.

Multiple-class Shares

Stocks issued by a single company that have different rights, dividends, or voting powers, typically designated as Class A, Class B, etc.

Front-end Load

A commission or sales charge applied at the time of the initial purchase of an investment.

SEC Rule 12b-1

A regulation by the U.S. Securities and Exchange Commission that allows mutual funds to charge their shareholders for advertising and sales promotion expenses.