Del Signs a Check "Pay to the Order of Eppie

question 3

Multiple Choice

Del signs a check "pay to the order of Eppie" drawn on Del's account in First Federal Bank.Greta forges Eppie's indorsement.First Federal pays the check.Most likely​ 

• A) ​Del will be liable for the amount. 
• B) ​Eppie will have to pay Del for the amount. 
• C) ​First Federal will have to recredit Del's account. 
• D) ​the Federal Reserve will reimburse all parties for their costs.

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Definitions:

Risk Premium

The additional return an investor requires to invest in an asset over a risk-free rate, compensating for the risk of the investment.

Yield

The income return on an investment, such as the interest or dividends received, often expressed as an annual percentage based on the investment’s cost, current market value, or face value.

CAPM Approach

The Capital Asset Pricing Model, a formula used to determine the expected return on investment (ROI) by correlating the risk and expected return.

Cost of Equity

The return that shareholders require or expect to earn on their investment in the company, considered as the company's cost of retaining and using equity capital.