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.

---

Definitions:

Contribution Margin Ratio

A financial metric that measures how much of a company's revenue is available to cover its variable costs and contribute to its fixed costs and profits.

Fixed Costs

Expenses that do not change with the level of goods or services produced by the business, such as rent, salaries, and insurance premiums.

Break-even Point

The point at which total income matches total outgoings, leading to neither a profit nor a loss.

Sales Dollars

This term represents the total revenue generated from the sales of goods or services, expressed in currency units.