Which of the Following Describes the Shelter Principle

question 24

Multiple Choice

Which of the following describes the shelter principle?

• A) In order to receive the benefits of a holder in due course status,all holders must qualify as holders in due course.
• B) Anyone who does not meet holder in due course requirements can obtain the same rights as a holder in due course through the shelter principle.
• C) The shelter principle gives additional special rights to only those who qualify as a holder in due course.
• D) One who takes an instrument from a holder in due course can often obtain the rights of a holder in due course,even if that transferee does not meet the requirements of a holder in due course.

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Definitions:

Open Market Operations

Activities undertaken by a central bank, such as the buying or selling of government securities, to control the money supply and interest rates.

Discount Rate

The interest rate charged by the Federal Reserve to depository institutions.

Federal Reserve

The Federal Reserve is the central bank of the United States, responsible for implementing the country's monetary policy, regulating banks, maintaining financial system stability, and providing financial services.

Monetary Growth

The increase in the money supply in an economy over time, which can influence inflation rates, interest rates, and economic growth.