Clay Issues a Check Payable to Discount Mart

question 16

Multiple Choice

Clay issues a check payable to Discount Mart.Ernestina,Discount's cashier,forges the store's indorsement and deposits the check in her bank ac?count.Clay's bank,First Friendly Bank,pays the check.Clay can recover from

• A)Ernestina,who can recover from First Friendly Bank.
• B)First Friendly Bank,which cannot recover from Ernestina.
• C)First Friendly Bank,which can recover from Ernestina.
• D)no one.

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Definitions:

360-Day Year

A conventional method in finance for simplifying interest calculations, assuming a year has 360 days.

Finance Company

A business that provides loans to individuals and companies, aside from traditional banking institutions, often specializing in certain types of loans.

Discounted

refers to a price that has been reduced from the original or list price, often to encourage sales or clear inventory.

Maturity Value

The amount payable to the holder of a financial instrument upon its maturity, including both the principal and the interest.