An Association of Banks Created for the Purpose of Settling

question 37

Multiple Choice

An association of banks created for the purpose of settling accounts with each other on a daily basis is a:

• A)payor banking group.
• B)clearinghouse.
• C)provisional reserve.
• D)None of these.

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Definitions:

Forward Contracts

Customizable financial contracts traded over-the-counter between two parties to buy or sell an asset at a specified future date for a price agreed upon today.

Economic Conditions

The state of an economy at a given time, encompassing factors like inflation, unemployment, and GDP growth.

Government Policies

Rules, regulations, and actions taken by a government to govern its citizens and manage its economic, social, and administrative affairs.

Nonconvertible Currency

A currency that cannot be freely exchanged for other currencies on the foreign exchange market due to foreign exchange controls.