People Who Present Drafts for Warranties

question 13

Multiple Choice

People who present drafts for warranties:

• A) do not make a warranty that they have knowledge of the insolvency proceedings commenced regarding the drawer.
• B) make a warranty that the instrument has not been altered.
• C) make warranties that are similar to those transferors make.
• D) make a warranty that they are aware of the unauthorized signature of the maker.

---

Definitions:

Call Contract

An options contract that gives the holder the right to buy an underlying asset at a specified price within a certain period.

Write

In finance, this term often refers to the act of selling a derivative contract, such as an option, thus obligating the writer to fulfill the contract terms if exercised.

Profit

Profit is the financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Call Premium

The additional amount that the price of a call option exceeds its intrinsic value, often influenced by time remaining until expiration and volatility.