Eve is a promoter and has approached Adam with an investment opportunity. Eve anticipates a generous profit and informs Adam that he too can realize a generous profit. This opportunity is not being offered to others. Assuming all other requirements to classify this as a security are in evidence, the commonality of this transaction would be described as a:

Question

Quizplus · Accepted Answer

When the promoter of a security and the single investor share a common expectation of profit, the transaction is classified as having a vertical commonality.

Eve Is a Promoter and Has Approached Adam with an Investment