Question 1

Which of the following can be negotiable?

Accepted Answer

A) A promissory note that states, "Pay to Floyd Burchett $3000 on September 1, 2015." 
B) A check written on the standard check form that does not state the date it was issued. 
C) A promissory note from Farmer Douglas to Hainey Seeds, Inc. promising to pay for the seed purchased in the spring with bushels of grain harvested in the fall. 
D) An oral promise to pay to the order of Justin $500 on demand. 
A) A promissory note that states, "Pay to Floyd Burchett $3000 on September 1, 2015." 
B) A check written on the standard check form that does not state the date it was issued. 
C) A promissory note from Farmer Douglas to Hainey Seeds, Inc. promising to pay for the seed purchased in the spring with bushels of grain harvested in the fall. 
D) An oral promise to pay to the order of Justin $500 on demand.

Question 2

Laurel Speckle received a check from State University.She indorsed the check as follows: "For Deposit only,/s/ Laurel Speckle." Laurel's indorsement is a(n)

Accepted Answer

A) blank indorsement. 
B) special indorsement. 
C) restrictive indorsement. 
D) improper indorsement. 
A) blank indorsement. 
B) special indorsement. 
C) restrictive indorsement. 
D) improper indorsement.

Question 3

To be negotiated,bearer paper must simply be delivered to the recipient.

Accepted Answer

A) True 
 B)False

Question 4

An instrument is negotiable if it satisfies six standards.Which of the following is a standard of negotiability?

Accepted Answer

A) The instrument can be oral provided there is proof beyond a reasonable doubt. 
B) The instrument must be signed by the payee. 
C) The instrument must be conditional. 
D) The instrument must state a definite sum of money. 
A) The instrument can be oral provided there is proof beyond a reasonable doubt. 
B) The instrument must be signed by the payee. 
C) The instrument must be conditional. 
D) The instrument must state a definite sum of money.

Question 5

With non-negotiable commercial paper,a transferee's rights are conditional.

Accepted Answer

A) True 
 B)False

Exam 25: Creating a Negotiable Instrument

Which of the following can be negotiable?

Laurel Speckle received a check from State University.She indorsed the check as follows: "For Deposit only,/s/ Laurel Speckle." Laurel's indorsement is a(n)

To be negotiated,bearer paper must simply be delivered to the recipient.

An instrument is negotiable if it satisfies six standards.Which of the following is a standard of negotiability?

With non-negotiable commercial paper,a transferee's rights are conditional.

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