For Several Years, Jelena Worked as an Agent for Vladimir

question 74

Multiple Choice

For several years, Jelena worked as an agent for Vladimir, a hockey player for the St Catharines Blackhawks.Jelena regularly negotiated Vladimir's contracts and agreed to them on his behalf.In August 2009, Vladimir terminated the agency.He had decided that he could negotiate his own contracts.He neglected to tell Jelena or the Blackhawks.In September 2009, Jelena signed a contract on his behalf with the Blackhawks for the 2009-2010 season.Which of the following is TRUE?

• A)The contract is not enforceable by the Blackhawks because Jelena's authority had been terminated.
• B)The contract is enforceable because, in the absence of notice to the Blackhawks that Jelena's authority had been terminated, she continued to have apparent authority to act for Vladimir.
• C)The contract is enforceable so long as Jelena negotiated a fair deal for Vladimir.
• D)The contract is not enforceable because Jelena was no longer acting in the best interests of Vladimir by negotiating the contract after she was terminated as an agent.
• E)The contract is not enforceable as Jelena was committing fraud by acting without authority, even if her termination had not been communicated to her.

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Definitions:

Put-call Parity

A principle in options pricing that shows the relationship between European put and call options with the same strike price and expiration date.

Risk-free Rate

The risk-free rate is the theoretical return of an investment with zero risk, representing the interest an investor would expect from an absolutely risk-free investment over a specified period.

Exercise Price

Also known as the strike price, it is the price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Put-call Parity

A financial principle stating the relationship between the price of European put and call options with the same strike price and expiration date.