Simon Put $5,000 Worth of Stocks and Bonds into an Asset

question 32

Multiple Choice

Simon put $5,000 worth of stocks and bonds into an asset management account at Fido Investments. One month later, his account statement indicated that he had a balance of $5 million. Simon quickly withdrew this amount from his account and put it into a Swiss bank account. Can Fido rescind its payment of $5 million to Simon on the grounds of mistake?

• A) No, because Simon and Fido made a mutual mistake.
• B) Yes, because even though Fido was at fault, Simon was well aware of Fido's mistake in crediting the extra amount to his account.
• C) No, because Fido should have exercised reasonable care while crediting the amount to Simon's account.
• D) Yes, because Fido was a victim of fraud by execution.

Recognize the components and structure of the stockholders' equity section in a corporation's balance sheet.

Understand the preferences and rights of preferred stock versus common stock.

Comprehend the roles and responsibilities of the board of directors and officers in a corporation.

Calculate key financial figures such as total paid-in capital and total stockholders' equity from given financial data.