Which of the Following Is Correct Regarding Whether the Bank

question 42

Multiple Choice

Which of the following is correct regarding whether the bank will legally have to accept responsibility for the check presented by Renee?

• A) The bank has no responsibility to repay Harold on the basis that because Renee was an employee, the check was not considered forged.
• B) The bank will be required to repay Harold because the check was forged.
• C) Harold will have to bear the loss because the check was paid before the bank had notice of the forgery.
• D) Harold will not have to bear the loss because the forgeries were by an employee; otherwise, he would have had to bear the loss.
• E) The bank will likely not be required to repay Harold because Harold's negligence in leaving the rubber stamp with his signature readily available likely substantially contributed to the forged signature.

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Definitions:

Treasury Stock

Shares that were once part of the outstanding shares but were bought back by the issuing company.

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights and a dividend entitlement.

No-par Common Stock

Common stock issued without a par value which means it is not assigned a nominal or face value, but it still represents ownership in a company.

Stated Value

A nominal value assigned to a corporation's stock that bears no relation to its market price, used for calculating capital stock.