Assume a Drawer Gives an Incomplete Check to a Payee

question 36

True/False

Assume a drawer gives an incomplete check to a payee without including the amount of the check,and the payee completes the check by filling in a higher amount than that authorized by the drawer; if the bank pays the check according to the unauthorized terms,the drawer is generally liable for payment of the check as completed.

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Definitions:

Call Option

A financial contract granting the buyer the right to buy an asset at a specified price before a set date.

Exercise Price

The cost at which the person holding the option has the right to purchase (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Underlying Stock

This refers to the stock on which derivative contracts, such as options and futures, are based.

American Call

A type of call option that can be exercised at any time before its expiration date.