Clyde Issues a Check Payable to Discount Mart

Multiple Choice

Clyde issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her account. Clyde's bank, Farmers State Bank, pays the check. Clyde's bank can recover the amount of the check from

A) Ethel, but not the bank that paid Ethel.
B) the bank that paid Ethel, which cannot recover from Ethel.
C) the bank that paid Ethel, which can recover from Ethel.
D) neither Ethel nor the bank that paid Ethel.