Your Firm Generally Receives 4 Checks a Month

question 50

Multiple Choice

Your firm generally receives 4 checks a month.The check amounts and the collection delay for each check is shown below.Given this information what is the amount of the average daily float? Assume a 30 day month.

• A)$1,120
• B)$2,333
• C)$2,640
• D)$2,900
• E)$3,416

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Definitions:

Intrinsic Value

The fundamental value of a company, stock, currency, or product determined through financial analysis without reference to its market value.

March Put

An options contract giving the holder the right to sell an asset at a specified price before or on a March expiration date.

Underlying Stock

The basic security or asset upon which derivative contracts, such as options and futures, are based.

Exercise Price

The predetermined price at which an option can be exercised, allowing the holder to buy or sell the underlying asset.