D. The request proves a potential attacker only needs to be able to guess or brute force three characters rather than 12 characters of the password.
Correct. By requesting only specific characters, an attacker would need to guess or brute force only a subset of the password (e.g., 3 out of 12 characters), significantly reducing the complexity and increasing the vulnerability.
E. The request proves the password is stored in a reversible format, making it readable by anyone at the bank who is given access.
Correct. The fact that the system can request specific characters of the password implies that the password is stored in a reversible format (e.g., plain text or encrypted but reversible), which is a significant security concern. Secure systems typically store passwords in a hashed format that does not allow for easy extraction of individual characters.