A Risk-Free Rate Can Be Measured by

question 27

Multiple Choice

A risk-free rate can be measured by

• A)the rate of inflation.
• B)the rate on corporate bonds.
• C)the Federal Reserve's discount rate.
• D)a rate of a Treasury security.

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Definitions:

Privity of Contract

A legal principle which holds that only parties to a contract can sue or be sued on that contract, highlighting the direct relationship involved.

Void Contract

A legal agreement that is invalid from the outset and has no legal effect, therefore cannot be enforced by law.

Voidable Contract

A legal agreement that may be invalidated or annulled by one or more of the parties involved due to certain conditions.

Privity of Contract

The principle that a contract is a private agreement between the parties who have entered into it, and no one else can claim benefits or be subjected to its obligations.