Jenny Went to the Store and Asked to See an AM-FM

question 78

Multiple Choice

Jenny went to the store and asked to see an AM-FM clock radio with a tape deck.The salesman brought out a clock radio that he said had all of the features that she wanted.After looking at the price tag and little else,Jenny said she would think about it.The salesman said that this was the most popular model sold,that they sold 1000 of them during the World Series alone,that it had the highest rating in Consumer Reports,and that he only had that one left.Jenny bought it.Later,she found out that all of the statements made to her by the salesman were false,including the one that the clock had all of the features she wanted,because it did not have an AM band.Which of the following is true?

• A)The equitable remedy of rescission is available only if Jenny is able to restore the clock radio to the seller.
• B)Jenny would only have a remedy for breach of contract (namely,the clock radio did not have an AM band)because none of the other statements was about the clock radio itself.
• C)The statements of the salesman are negligent only if the salesman knew they were false.
• D)Jenny could obtain the remedy of rescission only if the statements made to induce her to contract were fraudulent.
• E)Jenny could return this clock radio to the seller only if she could prove undue influence.

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Definitions:

Shares

Shares represent ownership stakes in a company or financial asset, equally splitting any profit distributions, known as dividends, if declared.

Incremental Value

The additional or extra value generated by undertaking a new project, making an investment, or initiating any new action compared to not doing so.

Incremental Value

The additional value created by undertaking a particular action, decision, or investment, beyond the status quo.

All-Equity Firms

Companies that are financed entirely through equity capital and do not have any debt obligations.