If Margie Makes Out a Check for $27

question 42

Multiple Choice

If Margie makes out a check for $27.50 when she has only $10 in her account, her bank may:

• A)refuse to pay the check.
• B)pay the check.
• C)bill Margie for $17.50 and a service charge.
• D)Any of these.

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Definitions:

Adjustable Maturity Dates

Adjustable maturity dates refer to the flexibility allowed in the due dates of financial instruments, allowing for changes in the repayment schedule.

Floating-Rate Bonds

Bonds with variable interest rates that adjust periodically based on a benchmark interest rate or index.

Coupon Rate

The interest payment made annually on a bond, shown in percentage terms of its face value.

Time To Maturity

The duration remaining until the final payment date of a loan, bond, or other financial instrument, at which point the principal (and usually the final interest payment) is due to be paid.