Quint Brings a Draft Drawn on Regional Credit Union and "Payable

question 31

Multiple Choice

Quint brings a draft drawn on Regional Credit Union and "payable to Silo LLC" to Regional. The credit union stamps "accepted" on the face of the draft, signs it, and dates it. Regional is

• A)no longer liable for payment of the draft.
• B)secondarily liable for payment of the draft.
• C)obligated to pay the draft when it is presented for payment.
• D)liable for payment of the draft thirty days after issue.

---

Definitions:

Interest Rate

The cost of borrowing money or the amount paid for the use of funds, expressed as a percentage of the principal.

Effective Annual Rates

The effective annual rate (EAR) is the actual interest rate that an investment earns due to compounding over a given period, usually one year.

Nominal Rate

The interest rate before adjustments for inflation, representing the face value of financial products.

Compounded Monthly

A method of calculating interest where the accrued interest is added to the principal sum at the end of each month, leading to "interest on interest."