Some Companies Have Customers Send Payments Directly to an Address

question 83

Multiple Choice

Some companies have customers send payments directly to an address maintained by a bank. This is called a(n) ________ system.

• A) direct deposit
• B) funds transfer
• C) lockbox
• D) interbank transfer

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Definitions:

Hedge

An investment strategy used to reduce risk by taking positions that offset potential losses in other investments.

Strike Price

The strike price is the price at which the holder of an option contract has the right to buy (for a call option) or sell (for a put option) the underlying asset or security upon exercise of the option.

Futures Option

An option contract that gives the holder the right, but not the obligation, to buy or sell a futures contract at a specified price on or before a certain date.

Forward Contract

A contractual arrangement to purchase or sell a given commodity or asset at a set price on a designated date in the future.