The Effect of the Making of a Partial Payment to Satisfy

question 5

Multiple Choice

The effect of the making of a partial payment to satisfy an admitted debt is an example of the rule that:

• A) past benefits cannot be consideration for a later promise.
• B) a conditional promise may be consideration.
• C) doing what one is already under a legal obligation to do is not consideration.
• D) consideration must be adequate to be binding.

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Definitions:

Perfect Hedge

A hedging strategy that completely eliminates the risk associated with a particular position or portfolio.

Interest Rates

The fee, shown as a percentage of the principal amount, that a lender requires from a borrower for the utilization of resources.

Prices Rise

An economic phenomenon where the general level of prices for goods and services increases over time.

Futures Contract

An arrangement, enforceable by law, where individuals agree to trade a specified commodity or financial instrument at a previously established price, to be fulfilled at a specified time ahead.