Which of the Following Is Incorrect with Respect to the Law

question 53

Multiple Choice

Which of the following is incorrect with respect to the law of infants and their parents?

• A) As a general rule, parents are not responsible for the contracts of their children.
• B) As a general rule, parents are not responsible for the torts of their children.
• C) A parent is responsible for the debt of his child if that parent has guaranteed the loan.
• D) A parent can be liable for a tort committed by her child if it can be shown that the parent was negligent as well.
• E) A parent is responsible for the obligations of her children in both tort and contract law.

---

Definitions:

Financial Leverage

Financial leverage is the use of borrowed funds to increase the potential return of an investment.

Breakeven Analysis

A financial calculation to determine the point at which revenue and expenses are equal, resulting in no net loss or gain.

Financial Leverage

The use of borrowed funds to finance the purchase of assets with the expectation that the income or capital gain from the new assets will exceed the cost of borrowing.

EBIT

A measure of a firm's profit that disregards expenses from interest and income taxes, termed as Earnings Before Interest and Taxes.