An Overdraft Is When

question 21

Multiple Choice

An overdraft is when:

• A) a check is more than the amount in the bank account.
• B) you open a savings account.
• C) do not use a personal check.
• D) earned interest is waived.

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Definitions:

Floating-Rate Debt

Debt securities with interest rates that reset periodically, based on a benchmark interest rate or index, thus providing protection against interest rate fluctuations.

Interest Rate Risk

The potential for investment losses that result from a change in interest rates, affecting debt instruments like bonds inversely to their price.

Investors

Investors are individuals or institutions that allocate capital with the expectation of receiving financial returns.

Maple Bonds

Foreign corporate or foreign government bonds issued in Canadian dollars to Canadian investors. Because maples are denominated in Canadian dollars, there is no currency or foreign interest rate risk.