Question 1

Marina is transferring a cheque to Scott by endorsing his name and her signature to the instrument. What is the legal name for this type of endorsement?

Accepted Answer

A)   special endorsement
B)   direct endorsement
C)   blank endorsement
D)   restrictive endorsementE) A) and B)
F) C) and D)

Question 2

The banks duty to honour cheques and repay deposits is an express obligation imposed by the federal Bank Act.

Accepted Answer

A) True 
 B)False

Question 3

Discuss the purpose of the banking agreement.

Accepted Answer

The purpose of the banking agreement is ...

Question 4

A promissory note is a written order to a bank to pay money to a specified person.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would be most strongly influenced by an honoured cheque?

Accepted Answer

A)   centralized clearing process
B)   inadequate funds in an account
C)   evidence of discharge of a debt
D)   unambiguous payment instructionsE) None of the above
F) All of the above C

Question 6

Which of the following creates the legal uncertainty surrounding electronic banking?

Accepted Answer

A)   Potential for forgery and fraud are changed and expanded.
B)   Existing legislation is irrelevant in a paperless environment.
C)   The bank is responsible for electronic failures.
D)   It increases potential for transmission failures and system crashes.E) B) and D)
F) B) and C)

Question 7

Since 1991, Canadian banking institutions, among others, have been urged to verify the identity of individual and corporate customers to determine the source of money transfers that exceed a certain amount. What is that amount?

Accepted Answer

A)   $500015 000
B)   $10 0005000
C)   $15 000
D)   $20 000E) A) and C)
F) B) and C) B

Question 8

Which of the following distinguishes a cheque from an Internet transaction?

Accepted Answer

A)   Electronic transfers are instantaneous.
B)   A cheque leaves a paper trail.
C)   A cheque increases efficiency.
D)   Verification is absent.E) All of the above
F) A) and D)

Question 9

Why should a commercial customer be cautious with regard to its bank-customer agreement?

Accepted Answer

A)   Banks create agreements to limit their duties and liabilities.
B)   Banks can transfer funds to cover negative balances.
C)   Bargaining for greater flexibility can create an advantage.
D)   Bargaining can limit a bank's ability to apply service charges.E) B) and D)
F) A) and B) A

Question 10

Identify the essential point for a creator of a cheque, and briefly discuss what is required in order for the bank to honour the cheque with respect to a payee or holder in due course.

Accepted Answer

The essential point for a creator of a c...

Question 11

In practical and legal terms, the focus is shifting to electronic banking, which includes a growing range and variety of transactions that previously required less formal documentation.

Accepted Answer

A) True 
 B)False

Question 12

As a result of the worldwide financial crisis, which of the following is a valid criticism of regulations created by the Bank for International Settlements with regard to international banking services?

Accepted Answer

A)   The ability to conduct cross-border transactions was limited.
B)   Voluntary governance rules failed to provide adequate protections.
C)   Accounts in different currencies were prohibited.
D)   The use of international letters of credit was too limited.E) C) and D)
F) B) and D)

Question 13

To which of the following is the bank's duty to maintain the secrecy of customer information subject?

Accepted Answer

A)   fraud and forgery legislation
B)   money laundering legislation
C)   federal privacy legislation
D)   provincial privacy legislationE) A) and C)
F) A) and B)

Question 14

One of the difficulties presented by the instantaneous nature of electronic transactions is that, while efficiency is greatly improved, the transfers are irrevocable.

Accepted Answer

A) True 
 B)False

Question 15

The acceptance of cheques for payment creates risk for the businesses that accepts them. The use of cheques for payment also creates risks for businesses paying for services or supplies. What are these risks?

Accepted Answer

The major risk involved in accepting a c...

Question 16

A written contract that contains an unconditional promise or order to pay a specified sum on demand or on a specific date to a specific individual or bearer is legally known as a bill of exchange.

Accepted Answer

A) True 
 B)False

Question 17

Describe the essence of the requirements that must be present for an instrument to become negotiable without the need to investigate its validity through reference to circumstances of the instrument's creation or to other documents.

Accepted Answer

The essence of the requirements for an i...

Question 18

Retailers embraced debit card use by consumers because the transfer of payment of goods is immediate and the risk is borne largely by the card provider.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following formerly applied to banks, trust companies, stockbrokerages, and insurance companies?

Accepted Answer

A)   participation by banks and trust companies in the insurance sector
B)   liberal ownership rules for national banking institutions
C)   prohibition from conducting business beyond a sector
D)   ability of subsidiary companies to sell insurance on websitesE) None of the above
F) C) and D)

Question 20

What is the second focus of a banking agreement?

Accepted Answer

A)   the rights and obligations of the parties
B)   the allocation of loss
C)   the protection of privacy
D)   the bank's ability to apply chargesE) All of the above
F) C) and D)

Exam 25: Business and Banking

Marina is transferring a cheque to Scott by endorsing his name and her signature to the instrument. What is the legal name for this type of endorsement?

Correct AnswerverifiedShow Answer

The banks duty to honour cheques and repay deposits is an express obligation imposed by the federal Bank Act.

Correct AnswerverifiedShow Answer

Discuss the purpose of the banking agreement.

Correct AnswerverifiedThe purpose of the banking agreement is ...View AnswerShow Answer

A promissory note is a written order to a bank to pay money to a specified person.

Correct AnswerverifiedShow Answer

Which of the following would be most strongly influenced by an honoured cheque?

Correct AnswerverifiedC

Which of the following creates the legal uncertainty surrounding electronic banking?

Correct AnswerverifiedShow Answer

Since 1991, Canadian banking institutions, among others, have been urged to verify the identity of individual and corporate customers to determine the source of money transfers that exceed a certain amount. What is that amount?

Correct AnswerverifiedB

Which of the following distinguishes a cheque from an Internet transaction?

Correct AnswerverifiedShow Answer

Why should a commercial customer be cautious with regard to its bank-customer agreement?

Correct AnswerverifiedA

Identify the essential point for a creator of a cheque, and briefly discuss what is required in order for the bank to honour the cheque with respect to a payee or holder in due course.

Correct AnswerverifiedThe essential point for a creator of a c...View AnswerShow Answer

In practical and legal terms, the focus is shifting to electronic banking, which includes a growing range and variety of transactions that previously required less formal documentation.

Correct AnswerverifiedShow Answer

As a result of the worldwide financial crisis, which of the following is a valid criticism of regulations created by the Bank for International Settlements with regard to international banking services?

Correct AnswerverifiedShow Answer

To which of the following is the bank's duty to maintain the secrecy of customer information subject?

Correct AnswerverifiedShow Answer

One of the difficulties presented by the instantaneous nature of electronic transactions is that, while efficiency is greatly improved, the transfers are irrevocable.

Correct AnswerverifiedShow Answer

The acceptance of cheques for payment creates risk for the businesses that accepts them. The use of cheques for payment also creates risks for businesses paying for services or supplies. What are these risks?

Correct AnswerverifiedThe major risk involved in accepting a c...View AnswerShow Answer

A written contract that contains an unconditional promise or order to pay a specified sum on demand or on a specific date to a specific individual or bearer is legally known as a bill of exchange.

Correct AnswerverifiedShow Answer

Describe the essence of the requirements that must be present for an instrument to become negotiable without the need to investigate its validity through reference to circumstances of the instrument's creation or to other documents.

Correct AnswerverifiedThe essence of the requirements for an i...View AnswerShow Answer

Retailers embraced debit card use by consumers because the transfer of payment of goods is immediate and the risk is borne largely by the card provider.

Correct AnswerverifiedShow Answer

Which of the following formerly applied to banks, trust companies, stockbrokerages, and insurance companies?

Correct AnswerverifiedShow Answer

What is the second focus of a banking agreement?

Correct AnswerverifiedShow Answer

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The purpose of the banking agreement is ...
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C

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B

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A

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The essential point for a creator of a c...
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The major risk involved in accepting a c...
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The essence of the requirements for an i...
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