Which of the Following Is True Regarding the Liability of an Accommodation

question 4

Multiple Choice

Which of the following is true regarding the liability of an accommodation party?

• A) As a maker, an accommodation party has primary liability; but as an endorser, the party has secondary liability.
• B) An accommodation party has primary liability both as a maker and as an endorser.
• C) An accommodation party has secondary liability both as a maker and as an endorser.
• D) An accommodation party has primary liability as either a maker or endorser only if all other parties to the instrument have filed bankruptcy.
• E) An accommodation party has primary liability as a maker only if all other parties have filed bankruptcy, and secondary liability in any other case regardless of whether the accommodation party is the maker or endorser.

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Definitions:

Smoothing Constant

A parameter used in exponential smoothing models to weight recent observations more heavily than older ones for forecasting purposes.

Exponential Smoothing

Exponential smoothing is a time series forecasting method for smoothing data values, giving more weight to recent observations while factoring in older data.

Moving Average

A statistical technique used to analyze time series data by creating a series of averages of different subsets of the full data set.

Trend Line

A line drawn through data points in a scatter plot to model the direction or pattern of the data, commonly used in time series data to visualize trends.