Fifth National Bank decided to loan $200,000 to Fred Franklin.As collateral for the loan,Fred posted stock certificates.When Fred defaulted on the loan,Fifth National tried to sell the stock.They discovered the stock certificates were stolen from someone else.Which insuring agreement in a financial institution bond is designed to cover such losses?

Question

Quizplus · Accepted Answer

Insuring Agreement D - Forgery or Alteration is designed to cover losses resulting from the bank's acceptance of or payment on any check, draft, or other instrument that has a forged or unauthorized signature or alteration. In this case, the bank accepted the stolen stock certificates as collateral, which would fall under this insuring agreement.

Fifth National Bank Decided to Loan $200,000 to Fred Franklin