In What Circumstances Is a Bank NOT Entitled to Refuse

question 9

Multiple Choice

In what circumstances is a bank NOT entitled to refuse to pay a cheque?

• A) The customer has become insane.
• B) The cheque is six months old.
• C) The customer has died.
• D) The cheque is post-dated and that date has not yet arrived.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.

Interest Rate Risk

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

Default Risk

The risk that a borrower will not make the required payments on their debt obligations.

Maturity Risk

The risk associated with the changing value of securities due to the time remaining until their maturity date.