Kelly Wrote a Check to Trish, Which Trish Immediately Changed

question 15

Multiple Choice

Kelly wrote a check to Trish, which Trish immediately changed from $20 to $120.She negotiated the check to Cam for value, who in turn took it to Kelly's bank for certification.Kelly's bank checked his account and certified the check since there were sufficient funds to cover the check.Thereafter, Cam gave the check to Ford as part of the down payment for his car.Ford presents the check to Kelly's bank for payment and they discover the alteration.What consequence?

• A)Bank can sue Ford for breach of presentment warranty of no alteration.
• B)Bank can charge Cam's account for $120.
• C)Bank can refuse to pay Ford more than $20.
• D)Bank must pay Ford $120 and cannot sue them for breach of warranty.

---

Definitions:

Interest-Rate Risk

The potential for investment losses that result from a change in interest rates, affecting the value of fixed-income securities inversely.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturation date, accounting for interest payments and the difference between purchase price and par value.

Coupon Bond

A type of bond that pays the holder a fixed interest rate (coupon) over its lifetime, and the principal is repaid at maturity.

Interest-Rate Risk

The potential for investment losses due to fluctuations in interest rates.