Consider a Game That Involves the Tossing of a Fair

question 59

Multiple Choice

Consider a game that involves the tossing of a fair coin.The winner is the individual who calls the outcome correctly, the loser obviously called the wrong outcome.The theory of efficient markets would say:

• A)Part of the key information is to know the outcomes of the previous tosses.
• B)The key information to know are the probabilities of the outcomes and the expected payoff.
• C)Part of the key information is to know the skill of the person you are playing against.
• D)Outcomes of events that require luck cannot be evaluated.

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Definitions:

Intentional Misrepresentation

Deliberate false statement by one party aimed at getting another party to enter into an agreement.

Mutual Mistake

An error made by both parties in a contract that can render the agreement void.

Negligent Misrepresentation

A false statement of material fact made by a person who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.

Reasonable Care

The degree of caution and concern an ordinarily prudent and rational person would use in similar circumstances, typically used in legal contexts.