The Bank of First Deposit Will Select the Clearing Mechanism

question 13

Multiple Choice

The bank of first deposit will select the clearing mechanism to use based on all of the following except:

• A)the dollar amount of the check
• B)the location of the draw bank
• C)the desires of the party that wrote the check
• D)the availability schedule the bank would be granted for each clearing alternative

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Definitions:

Call Option

A call option is a financial contract that gives the holder the right, but not the obligation, to buy an asset at a predetermined price within a specific time period.

Call Option Contracts

Financial contracts that give the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other assets at a specified price within a specific time period.

Strike Price

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

Market Value

Market value refers to the current price at which an asset or a company can be bought or sold on the open market.