Fact Pattern Mutual Company Enters into a Contract to Employ Neil as Employ

question 23

Multiple Choice

Fact Pattern
Mutual Company enters into a contract to employ Neil as an investment manager for two years.During the first year,Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.
-Refer to Fact Pattern 10-A1.Neil's performance is most likely

• A)a material breach.
• B)a minor breach.
• C)Mutual's breach.
• D)no breach.

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Definitions:

Put Options

Financial contracts granting the holder the right to sell an asset at a predetermined price before a specified date.

Call Options

Financial contracts giving the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Underlying Asset

The financial instrument upon which derivative contracts, like options and futures, are based.

Covered Call

A combination of selling a call option together with buying the underlying asset.