Content Linking with out Context

Question: If a client (website "E") has keyword "A" and "B" on there site and link to website "B" and "D". Would our client give any juice or vote of authority to website "A"?

Answer: In short no, primarily because the content containing the keywords for website "A" is not being linked. therefore their is no direct correlation between site "E" and site "A". They would of course give some authority to "B" and "D" with more power being attributed to site "B" due to the context of the page. 

Example

Whiteboard Example of the Question

Discussion: What would be the indirect correlation and effect given the situation above? Please provide your feedback in the comments below.