Question 1

An instrument payable to the order of an identified person is a bearer instrument .

Accepted Answer

A) True 
 B)False

Question 2

A demand is the first delivery of an instrument to a holder.

Accepted Answer

A) True 
 B)False

Question 3

With respect to negotiability, it is not necessary to know when the instrument is due.

Accepted Answer

A) True 
 B)False

Question 4

Usually, indorsements are unqualified indorsements.

Accepted Answer

A) True 
 B)False

Question 5

To finance the purchase of an electric guitar, Milos signs an instrument promising to pay to "National Lenders" $1,800 with interest in installments with the final payment due August 15, 2020. To be negotiable, this instrument must include on its face

Accepted Answer

A)  any conditions on the sale of the goods. 
B)  any conditions to the disbursement of the funds. 
C)  any conditions to the repayment of the loan. 
D)  no conditional promises or orders to pay . 
A)  any conditions on the sale of the goods. 
B)  any conditions to the disbursement of the funds. 
C)  any conditions to the repayment of the loan. 
D)  no conditional promises or orders to pay .

Question 6

A negotiable instrument can be transferred by assignment.

Accepted Answer

A) True 
 B)False

Question 7

For an instrument to be negotiable, a signature must be made manually.

Accepted Answer

A) True 
 B)False

Question 8

Emily writes and signs a check payable to "Festival Cinema." Georg, Festival's manager, indorses the check "For deposit only." This is

Accepted Answer

A)  a blank indorsement. 
B)  a qualified indorsement. 
C)  a restrictive indorsement. 
D)  a special indorsement. 
A)  a blank indorsement. 
B)  a qualified indorsement. 
C)  a restrictive indorsement. 
D)  a special indorsement.

Question 9

On the back of a check payable to Nero, Nero writes "Pay to Odell, without recourse" and signs it. This

Accepted Answer

A)  does not effect the check's negotiability or any party's liability. 
B)  relieves Nero of liability on the check if he has not breached any transfer warranties. 
C)  relieves Odell of liability on the check if he has not breached any transfer warranties. 
D)  renders the check nonnegotiable. 
A)  does not effect the check's negotiability or any party's liability. 
B)  relieves Nero of liability on the check if he has not breached any transfer warranties. 
C)  relieves Odell of liability on the check if he has not breached any transfer warranties. 
D)  renders the check nonnegotiable.

Question 10

Any instrument that orders the drawee to pay a certain sum of money is a draft .

Accepted Answer

A) True 
 B)False

Question 11

To be negotiable, an instrument must state with certainty a fixed amount of money at the time the instrument is payable.

Accepted Answer

A) True 
 B)False

Question 12

Pedro signs an instrument that states it is being executed "as per a contract for the sale of a case of apples dated May 1." This instrument is

Accepted Answer

A)  not necessarily nonnegotiable . 
B)  nonnegotiable, because banks cannot easily process commodities. 
C)  nonnegotiable, because it includes the specific date of a contract. 
D)  nonnegotiable, because it refers to an express contract. 
A)  not necessarily nonnegotiable . 
B)  nonnegotiable, because banks cannot easily process commodities. 
C)  nonnegotiable, because it includes the specific date of a contract. 
D)  nonnegotiable, because it refers to an express contract.

Exam 22: The Essentials of Negotiability

An instrument payable to the order of an identified person is a bearer instrument .

A demand is the first delivery of an instrument to a holder.

With respect to negotiability, it is not necessary to know when the instrument is due.

Usually, indorsements are unqualified indorsements.

To finance the purchase of an electric guitar, Milos signs an instrument promising to pay to "National Lenders" $1,800 with interest in installments with the final payment due August 15, 2020. To be negotiable, this instrument must include on its face

A negotiable instrument can be transferred by assignment.

For an instrument to be negotiable, a signature must be made manually.

Emily writes and signs a check payable to "Festival Cinema." Georg, Festival's manager, indorses the check "For deposit only." This is

On the back of a check payable to Nero, Nero writes "Pay to Odell, without recourse" and signs it. This

Any instrument that orders the drawee to pay a certain sum of money is a draft .

To be negotiable, an instrument must state with certainty a fixed amount of money at the time the instrument is payable.

Pedro signs an instrument that states it is being executed "as per a contract for the sale of a case of apples dated May 1." This instrument is

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