Marta Has a Checking Account with Neighbors Bank

question 51

Multiple Choice

Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is

• A) the payor.
• B) the drawee.
• C) the drawer.
• D) the payee.

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Definitions:

Equity

represents the value of an ownership interest in a company, measured as the difference between assets and liabilities; it reflects what shareholders would theoretically receive if all assets were liquidated and debts repaid.

Leveraged Firm

A company that utilizes borrowed money or debt to finance its operations and expansion, potentially increasing its returns or losses.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specific time frame.

American Option

A category of options agreement allowing execution at any moment prior to its expiry date.