Merry Draws a Check Payable to "Cash" and Presents It

question 17

Multiple Choice

Merry draws a check payable to "Cash" and presents it to National Bank for payment. This instrument is

• A) a bearer instrument.
• B) an order instrument.
• C) valid but nonnegotiable.
• D) void.

---

Definitions:

Stock Beta

A gauge for assessing the risk or volatility inherent in a security or portfolio against the entire market's movements.

Risk-free Interest Rate

The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield on government bonds.

Two-factor Model

A financial model that considers two sources of risk in its valuation or pricing, typically used in evaluating or predicting financial returns.

Market Risk

The risk of losses due to factors that affect an entire market or asset class, also known as systematic risk, which cannot be eliminated through diversification.