Question 1

A transfer by assignment can make it possible for a transferee to receive more rights in the instrument than the prior possessor had.

Accepted Answer

A) True 
 B)False

Question 2

Thalia signs an instrument unconditionally promising to pay to "Union Bank" $7500 with interest in installments with the final payment due June 1,2017.
-Refer to Fact Pattern 23-3. With respect to this instrument,Union Bank is

Accepted Answer

A) thedrawee. 
B) theindorser. 
C) themaker. 
D) the payee. 
A) thedrawee. 
B) theindorser. 
C) themaker. 
D) the payee.

Question 3

A maker is secondarily liable on an instrument.

Accepted Answer

A) True 
 B)False

Question 4

Negotiating order instruments requires either delivery or indorsement but not both.

Accepted Answer

A) True 
 B)False

Question 5

A holder takes an instrument for value by promising to perform in the future.

Accepted Answer

A) True 
 B)False

Question 6

Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is

Accepted Answer

A) negotiable. 
B) notnegotiable,because it does not specify a rate of interest. 
C) notnegotiable,because it is a promissory note. 
A) negotiable. 
B) notnegotiable,because it does not specify a rate of interest. 
C) notnegotiable,because it is a promissory note.

Question 7

Bernice signs a promissory note for $1,500 in favor of Community College. The note is undated but specifies that it is "payable one month after date." This note is

Accepted Answer

A) negotiable. 
B) notnegotiable,because one month is not a reasonable time. 
C) notnegotiable,because there is no option to pay early. 
D) notnegotiable,because the maturity date cannot be deter-mined from the face of the instrument. 
A) negotiable. 
B) notnegotiable,because one month is not a reasonable time. 
C) notnegotiable,because there is no option to pay early. 
D) notnegotiable,because the maturity date cannot be deter-mined from the face of the instrument.

Question 8

A purchaser can become an HDC of an instrument even if it is so incomplete that an element of negotiability is lacking.

Accepted Answer

A) True 
 B)False

Question 9

With respect to negotiability,the location of a signature on a document is important.

Accepted Answer

A) True 
 B)False

Question 10

LNG Corporation and Midstates Utility Company enter a contract for a sale of liquefied natural gas. LNG draws a draft unconditionally ordering Midstates Utility to pay $50,000 to LNG's order in sixty days. Midstates Utility signs and dates the draft.
-Builders Exchange,Inc.,issues an instrument in favor of Custom Construction Company. For the instrument to be negotiable,it must

Accepted Answer

A) be a conditional promise or order to pay. 
B) be payable on demand or at a specific time. 
C) be signed by the payee. 
D) recite the consideration given in exchange for it. 
A) be a conditional promise or order to pay. 
B) be payable on demand or at a specific time. 
C) be signed by the payee. 
D) recite the consideration given in exchange for it.

Question 11

Talia,who is not a Urban Bank customer,attempts to cash a check drawn on the bank. The check is considered dishonored if Urban Bank

Accepted Answer

A) refuses to pay it. 
B) charges a fee to cash it. 
C) asks Talia for reasonable identification. 
D) asks Talia to sign a receipt for the payment on the check. 
A) refuses to pay it. 
B) charges a fee to cash it. 
C) asks Talia for reasonable identification. 
D) asks Talia to sign a receipt for the payment on the check.

Question 12

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

Accepted Answer

A) True 
 B)False

Exam 23: Negotiable Instruments

A transfer by assignment can make it possible for a transferee to receive more rights in the instrument than the prior possessor had.

Thalia signs an instrument unconditionally promising to pay to "Union Bank" $7500 with interest in installments with the final payment due June 1,2017. -Refer to Fact Pattern 23-3. With respect to this instrument,Union Bank is

A maker is secondarily liable on an instrument.

Negotiating order instruments requires either delivery or indorsement but not both.

A holder takes an instrument for value by promising to perform in the future.

Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is

Bernice signs a promissory note for $1,500 in favor of Community College. The note is undated but specifies that it is "payable one month after date." This note is

A purchaser can become an HDC of an instrument even if it is so incomplete that an element of negotiability is lacking.

With respect to negotiability,the location of a signature on a document is important.

Talia,who is not a Urban Bank customer,attempts to cash a check drawn on the bank. The check is considered dishonored if Urban Bank

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

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