Zeke Indorsed His Paycheck in Blank and Cashed It at His

question 39

Multiple Choice

Zeke indorsed his paycheck in blank and cashed it at his local grocery store.A burglar stole the check from the store, which immediately notified Zeke's employer.The employer gave the drawee bank a stop payment order.The burglar indorsed the check with a false name and transferred it to a convenience store, which took it for value and in good faith.When the check is presented to the drawee bank:

• A)in the absence of a real defense, the convenience store is entitled to payment from the drawer.
• B)the forged indorsement prevents the convenience store from collecting payment on the check.
• C)the convenience store cannot receive payment because it is not a holder.
• D)the convenience store cannot receive payment because it is not a holder in due course.

---

Definitions:

Moral Hazard

The situation in which one party is more likely to take risks because another party bears the cost of those risks.

Active Portfolio Managers

Investment professionals who actively make decisions to buy, sell, or hold assets in order to beat the market average or achieve specific investment objectives.

Beat the Market

Achieving investment returns that surpass benchmark or average returns of the financial markets.

Interest Rate

The expense associated with lending funds or the profit gained from investments, usually represented as a percentage.