Question

If a firm places a temporary hold on a customer's account:

A. It applies to either the entire account or specific disbursements
B. It applies to the entire account
C. It only applies to specific disbursements
D. It only applies to a specific transfer of securities

Answer 1

When a firm places a temporary hold on a customer's account, it can apply either to the entire account or specific disbursements. A temporary hold is typically used to freeze a certain amount of funds for a specific purpose, such as to cover a pending transaction or to prevent unauthorized withdrawals.

Step-by-step explanation:

When a firm places a temporary hold on a customer's account, it can apply either to the entire account or specific disbursements. A temporary hold is typically used to freeze a certain amount of funds for a specific purpose, such as to cover a pending transaction or to prevent unauthorized withdrawals. This hold can be placed by the bank or the customer, depending on the situation.

For example, if a customer suspects fraudulent activity on their account, they can contact their bank and request a temporary hold on their entire account. This will prevent any transactions from being processed until the issue is resolved.

In another scenario, a customer may need to make a large purchase and want to ensure that they have enough funds available. They can request a temporary hold on a specific disbursement, like a check or electronic payment, to reserve the necessary amount.