Which of the Following Is True of a Collecting Bank

question 27

Multiple Choice

Which of the following is true of a collecting bank?

• A) A collecting bank is an agent of the owner of an item only after settlement becomes final.
• B) The relationship between a collecting bank and the owner of an item, once settled, becomes a debtor-creditor relationship.
• C) A collecting bank may not be a sub-agent of the owner until settlement becomes final.
• D) Collecting banks must give substantially more  warranties  than those given by parties under Article 3 upon presentment and transfer.

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Definitions:

Binomial Probability

The probability of achieving a specific number of successes in a fixed number of independent trials, where each trial has two possible outcomes.

Normal Curve

A bell-shaped curve depicting the distribution of many types of data; most scores are near the mean, with fewer scores toward the extremes.

Normal Distribution

In this probability distribution, symmetry is observed around the mean, illustrating that nearer data points are more common than distant ones.

Sample Size

The number of observations or data points collected in a sample from a larger population.