A Firm Issued Three Cheques for $25,000, $15,000, and $13,000

question 67

Multiple Choice

A firm issued three cheques for $25,000, $15,000, and $13,000 on January 31, and deposited a $30,000 cheque into the bank account.None of the cheques were cleared by February 1.What is the net float from these transactions?

• A)-$23,000
• B)+$23,000
• C)-$83,000
• D)+$83,000 Payment float = 25,000 + 15,000 + 13,000 = 53,000
• Availability float = 30,000
• Net float = Payment float - availability float

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Definitions:

Technical Analysis

Research to identify mispriced securities that focuses on recurrent and predictable stock price patterns and on proxies for buy or sell pressure in the market.

Strong Form

Strong form is a type of efficient market hypothesis that suggests all information, both public and private, is fully reflected in stock prices, making it impossible to consistently achieve higher returns.

EMH

Efficient Market Hypothesis, the theory that all available information is already reflected in stock prices, and it is impossible to consistently achieve higher returns.

Insider Information

Knowledge about a company's activities or financial condition that has not been made public and that can provide a financial advantage in the market.