Efficient Funds Management Attempts to Reduce Mailing and Clearing Time

question 15

Multiple Choice

Efficient funds management attempts to reduce mailing and clearing time. Two methods do this by:

• A) moving collections and deposits closer together in concentration banks; and moving surplus funds quickly by wire transfers.
• B) moving mailing points to cross country locations and using depository drafts to transfer funds.
• C) drawing checks against zero balance accounts and using cross country mailing.
• D) wiring funds to zero balance accounts and using lockboxes in many cities.

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Definitions:

Expected Rate of Return

The return an investor anticipates receiving from an investment, considering all possible outcomes or the performance of the asset over time.

Interest Rate

The rate at which a loan accumulates interest for the borrower, typically denoted as an annual percentage of the loan's still-to-be-repaid amount.

Capital Facilities

Physical assets that are significant in nature, used in operations such as buildings, roads, and machinery, fundamental to conducting business or providing services.

Expected Rate of Return

Refers to the profit or loss an investor anticipates on an investment that has various known or expected rates of return.