Question 1

A traveler's check that requires,as a condition to payment,the countersignature of a person whose specimen signature appears on the draft:

Accepted Answer

A)  is negotiable.
B)  is not negotiable.
C)  is negotiable only if it is payable "to cash."
D)  is not negotiable only if it is payable "at sight."E) All of the above
F) B) and C)

Question 2

Ricardo borrowed $1,000 from his friend,John Wilfred.Ricardo signed a handwritten note stating,"I promise to pay $1,000 to John Wilfred on or before August 1,2001." Under these circumstances:

Accepted Answer

A)  the note is negotiable because it was handwritten.
B)  the note is not negotiable because it does not acknowledge the reason for the debt.
C)  the note is not negotiable because it is not payable to order or to bearer.
D)  the note is negotiable because it is a simple contract.E) A) and B)
F) B) and C)

Question 3

An instrument must be signed to qualify as a negotiable instrument.Which of the following statements is true of this basic requirement?

Accepted Answer

A)  An instrument in the form of a note must be signed by the payee who accepts the promise of the issuer.
B)  An instrument in the form of a draft must be signed by the person giving the instruction to pay.
C)  An instrument is considered to be negotiable only when the maker signs by writing his name on it.
D)  A person or company cannot authorize an agent to sign instruments for it.E) B) and D)
F) B) and C)

Question 4

If an instrument satisfies the formal requirements of writing,signature,unconditional order to pay,and pay ability on demand:

Accepted Answer

A)  it is negotiable even though it is void or unenforceable for other reasons.
B)  it cannot be held by a holder in due course.
C)  validity of the instrument is automatically conferred.
D)  it is not negotiable if it is uncollectible for other reasons.E) All of the above
F) B) and C)

Question 5

A note which contains the statement,"I owe you $500":

Accepted Answer

A)  constitutes an order to pay.
B)  constitutes a promise to pay.
C)  is not a negotiable instrument.
D)  is a negotiable instrument.E) B) and D)
F) All of the above

Question 6

Which of the following instruments is negotiable?

Accepted Answer

A)  A note which states,"I promise to pay to the order of Karl Adams $1,000 if he replaces the roof on my garage."
B)  An instrument which provides,"Payment is subject to the terms of a mortgage dated November 20,2009."
C)  A note which contains the statement,"This note is secured by a mortgage dated August 30,2009."
D)  An instrument which reads,"I promise to pay to the order of MyHome Appliance Co.$550 sixty days after the delivery of my new refrigerator."E) A) and B)
F) A) and C)

Question 7

Richard borrowed $100 from his friend,Leonard Smith.Richard signed a handwritten note stating,"I promise to pay $100 to the order of Leonard Smith." Under these circumstances:

Accepted Answer

A)  the note is negotiable because it is a simple contract.
B)  the note is not negotiable because it does not acknowledge the reason for the debt.
C)  the note is not negotiable because it does not state the time payment is due.
D)  the note is negotiable because it meets the requirements for negotiability.E) All of the above
F) A) and D)

Question 8

Negotiability is the same thing as validity with regard to commercial paper.

Accepted Answer

A) True 
 B)False

Question 9

Any instrument that does not meet the formal requirements for negotiability will be treated as a simple contract rather than a negotiable instrument.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true of the articles of the UCC that deal with the law of commercial paper?

Accepted Answer

A)  The law of commercial paper is covered in Article 3 and Article 4 of the Uniform Commercial Code.
B)  Revised Article 3 of the UCC developed in 1990 has now been adopted by almost all the states.
C)  The law of commercial paper is covered only in Article 3 of the UCC that deals with negotiable instruments.
D)  Negotiable documents,such as investment securities and documents of title,are also treated in Article 3 of the UCC.E) A) and B)
F) None of the above

Exam 38: Negotiable Instruments

If an instrument satisfies the formal requirements of writing,signature,unconditional order to pay,and pay ability on demand:

Correct Answer
verified

Which of the following is true of the articles of the UCC that deal with the law of commercial paper?

Correct Answer
verified

Ricardo borrowed $1,000 from his friend,John Wilfred.Ricardo signed a handwritten note stating,"I promise to pay $1,000 to John Wilfred on or before August 1,2001." Under these circumstances:

Correct Answer
verified

Richard borrowed $100 from his friend,Leonard Smith.Richard signed a handwritten note stating,"I promise to pay $100 to the order of Leonard Smith." Under these circumstances:

Correct Answer
verified

Negotiability is the same thing as validity with regard to commercial paper.

Correct Answer
verified

A note which contains the statement,"I owe you $500":

Correct Answer
verified

A traveler's check that requires,as a condition to payment,the countersignature of a person whose specimen signature appears on the draft:

Correct Answer
verified

Which of the following instruments is negotiable?

Correct Answer
verified

Any instrument that does not meet the formal requirements for negotiability will be treated as a simple contract rather than a negotiable instrument.

Correct Answer
verified

An instrument must be signed to qualify as a negotiable instrument.Which of the following statements is true of this basic requirement?

Correct Answer
verified

Exam 38: Negotiable Instruments

If an instrument satisfies the formal requirements of writing,signature,unconditional order to pay,and pay ability on demand:

Correct AnswerverifiedShow Answer

Which of the following is true of the articles of the UCC that deal with the law of commercial paper?

Correct AnswerverifiedShow Answer

Ricardo borrowed $1,000 from his friend,John Wilfred.Ricardo signed a handwritten note stating,"I promise to pay $1,000 to John Wilfred on or before August 1,2001." Under these circumstances:

Correct AnswerverifiedShow Answer

Richard borrowed $100 from his friend,Leonard Smith.Richard signed a handwritten note stating,"I promise to pay $100 to the order of Leonard Smith." Under these circumstances:

Correct AnswerverifiedShow Answer

Negotiability is the same thing as validity with regard to commercial paper.

Correct AnswerverifiedShow Answer

A note which contains the statement,"I owe you $500":

Correct AnswerverifiedShow Answer

A traveler's check that requires,as a condition to payment,the countersignature of a person whose specimen signature appears on the draft:

Correct AnswerverifiedShow Answer

Which of the following instruments is negotiable?

Correct AnswerverifiedShow Answer

Any instrument that does not meet the formal requirements for negotiability will be treated as a simple contract rather than a negotiable instrument.

Correct AnswerverifiedShow Answer

An instrument must be signed to qualify as a negotiable instrument.Which of the following statements is true of this basic requirement?

Correct AnswerverifiedShow Answer

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