Jacob Writes Phillip an Uncertified Check for $500 on January

question 42

Multiple Choice

Jacob writes Phillip an uncertified check for $500 on January 1.Seven months later,Phillip presents the check at the bank.The bank pays the check in good faith without consulting Jacob.The bank

• A)does not have the right to charge Jacob's account for $500.
• B)only has the right to charge Jacob's account for $250.
• C)has the right to charge Jacob's account for $500.
• D)can be held liable for breach of contract.

---

Definitions:

Mexican Peso

The currency of Mexico, used as a medium of exchange within the country.

Real Interest Rates

Real interest rates are the interest rates adjusted for the effects of inflation, reflecting the true cost of borrowing and the true yield on savings.

International Fisher Effect

A theory that describes the relationship between interest rates and currency exchange rates, asserting that differences in interest rates between two countries will result in an equal change in exchange rates.

Interest Rate Parity

A theory explaining the relationship between interest rates and the exchange rate between two currencies.