Reference no: EM132217429
1. All of the following could accurately be considered reasons that a bank will establish a "cutoff hour," except:
A) To process items.
B) To prove balances.
C) To trade bank securities in established markets.
D) To make entries to determine the bank's position for the day.
2. Advantages associated with holding a certified check include all of the following, except:
A) A certified check has already been accepted by the drawee bank.
B) A certified check earns interest up until the date is accepted.
C) The bank assumes responsibility for payment of the certified check.
D) The bank sets aside funds from its customer's account to cover the amount of the check.
3. A "depositary bank" is best defined as:
A) The last bank that makes payment on or accepts a negotiable instrument.
B) The first bank to which an item is transferred for collection.
C) Every bank that has a policy of accepting certified checks for deposit.
D) A bank that accepts deposits but does not transfer items for collection.
4. A party who is a "holder in due course" of a negotiable instrument:
A) Has title to the instrument, but risks defenses available against the original party to the instrument.
B) Has title to the instrument free and clear of defenses available against the original party to the instrument.
C) Does not have title to the instrument, but is likely to have title to the instrument in the foreseeable future.
D) Is required to wait for a determined period of time before it can present the negotiable instrument to a bank.