Asked by Stone Jamison on May 20, 2024
Verified
Tony gives Sonora a check for $500. Sonora deposits it in her local bank, which transfers the check to the Federal Reserve Bank in Chicago, which transfers it to Tony's bank in Wisconsin. What type of bank is the Federal Reserve Bank in this situation?
A) A collecting bank or an intermediary bank
B) A provisional bank
C) A depository bank
D) A collecting bank, but not an intermediary bank
E) A payor bank
Collecting Bank
A collecting bank is a bank that handles the collection of payments on behalf of a depositor, including processing checks and drafts.
Federal Reserve Bank
The central banking system of the United States, responsible for determining national monetary policy and regulating financial institutions.
Depository Bank
A financial institution where securities and assets are stored and managed on behalf of their clients.
- Recognize the requirements for electronic check presentment and processing checks electronically.
Verified Answer
IŠ
Imrañ Š?ataratMay 24, 2024
Final Answer :
A
Explanation :
The Federal Reserve Bank acts as an intermediary or collecting bank when it facilitates the transfer of funds from one bank to another, as in the process of clearing a check from the depositor's bank to the payer's bank.
Learning Objectives
- Recognize the requirements for electronic check presentment and processing checks electronically.