When a Bank Presents a Check to the Fed for Clearing

question 3

Multiple Choice

When a bank presents a check to the Fed for clearing, the Fed promises to credit the bank for the amount

• A)as soon as the Fed is able to present the check to the payor bank.
• B)immediately.
• C)within two business days.
• D)within six months.

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Definitions:

Portfolio Risk

The potential for loss or underperformance across a collection of investments held by an individual or institution.

Expected Return

The anticipated return on an investment, taking into account all possible outcomes, their probabilities, and their corresponding returns.

Required Return

The minimum rate of return on an investment that is necessary for an investor to consider making that investment.

Market Risk

The risk of losses in positions arising from movements in market prices.