Question

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 also. 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:

A. horizontal commonality.
B. parallel commonality.
C. vertical commonality.
D. common commonality

Answer 1

Answer: Vertical Commonality

Explanation: Vertical Commonality explains that the promoter and investor share a very close relationship and the success of the both of them is dependent on each other. Adam an investor and Eve the promoter share a vertically common relationship.