Which of the Following Statements Holds True for Conversion

question 47

Multiple Choice

Which of the following statements holds true for conversion?

• A)Conversion occurs if an instrument has the indorsement necessary for negotiation.
• B)Conversion occurs if an instrument is purchased or paid by a drawee to a person entitled to payment.
• C)An action for conversion may not be brought by the maker,drawer,or acceptor of the instrument.
• D)An action for conversion may not be brought by a payee or an indorsee who received delivery of the instrument.

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Definitions:

Put Option

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

Sell Shares

The act of offloading equity stakes in a company, usually in the form of stock, to raise capital or realize gains from investment.

Exercise Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset or security.

Black-Scholes

A mathematical model used to determine the theoretical price of European-style options, factoring in time, volatility, interest rates, and dividend payments.