Klaus Forges Lot's Name as the Maker of a Note

question 11

Multiple Choice

Klaus forges Lot's name as the maker of a note "payable to Klaus." Klaus indorses the note in blank, sells it to Mort, and disappears. Without indorsement, Mort sells the note to Nora, who, also without indorsement, sells the note to Obie. On discovery of the forgery, most likely liable to Obie is

• A)none of the choices.
• B)Lot.
• C)Mort.
• D)Nora.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Deposit Insurance

Deposit Insurance is a protection scheme for bank depositors that guarantees the safety of deposits in member banks, up to a certain limit, in the event of a bank failure.

Moral Hazard

A situation in which one party is more likely to take risks because they do not have to bear the full consequences of their actions, often seen in insurance and finance.

Risk Aversion

A preference for lower risk investments, often reflecting an investor's reluctance to accept a high likelihood of losses.