Carl, Without Eddie's Knowledge, Impersonates Eddie and Thereby Convinces Connie

question 56

Multiple Choice

Carl, without Eddie's knowledge, impersonates Eddie and thereby convinces Connie, who has never seen Eddie, to write a check to Eddie, on which Carl forges Eddie's name and deposits into his, Carl's, account. Which of the following is true regarding whether Connie will be liable for the amount of the check?

• A) Under the forgery rule, Connie will be held liable.
• B) Under the transferor rule, Connie will be held liable.
• C) Under the payee rule, Connie will be held liable.
• D) Under the imposter rule, Connie will be held liable.
• E) Under the fictitious payee rule, Connie will not be held liable.

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Definitions:

Opportunity Rate

The expected rate of return on the best alternative investment option.

Monthly Cash Flows

The net amount of cash being transferred into and out of a business during a particular month.

Miller-Orr Model

A financial model used to manage cash flows and cash reserves, predicting the optimal level of cash balance a company should maintain.

Weekly Interest Rate

The amount of interest charged or earned over a week, often used to describe the rate for loans or savings accounts on a weekly basis.