Question 1

Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

Accepted Answer

A) True 
 B)False  False

Question 2

What is a bearer paper?

Accepted Answer

Bearer paper is an instrument that either (1) contains on its face an order to pay the bearer or to pay in cash, or (2) contains as its last endorsement a so-called blank endorsement, that is, the signature of the payee or the signature of the last endorsee named in a special endorsement. Bearer paper is negotiated by delivery alone. The use of bearer paper is riskier than the use of order paper. If it is lost or stolen it must still be paid.

Question 3

What is an endorsement? What are the different types of endorsements?

Accepted Answer

The act of a payee, drawee, accommodation party, or holder of a negotiable instrument in signing the back of the instrument, with or without qualifying words, to transfer rights in the instrument to another is known as endorsement. An endorsement is required to negotiate a bill or note that is in the form of order paper, and it may optionally be added to bearer paper. Endorsements are signatures, with or without additional statements that are commonly written on the back of the instrument. There are four basic kinds: (1) special endorsements, (2) blank endorsements, (3) qualified endorsements, and (4) restrictive endorsements.

Question 4

Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

Accepted Answer

A) True 
 B)False

Question 5

The common law requires a note to contain the words "promissory note."

Accepted Answer

A) True 
 B)False

Question 6

A bearer paper is different from an order paper in that a bearer paper ________.

Accepted Answer

A)  cannot be negotiated 
B)  is negotiated by endorsement and delivery 
C)  is negotiated by delivery alone 
D)  is negotiated by endorsement alone 
A)  cannot be negotiated 
B)  is negotiated by endorsement and delivery 
C)  is negotiated by delivery alone 
D)  is negotiated by endorsement alone

Question 7

The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n) ________.

Accepted Answer

A)  deed 
B)  allonge 
C)  sight bill 
D)  time bill 
A)  deed 
B)  allonge 
C)  sight bill 
D)  time bill

Question 8

Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

Accepted Answer

A) True 
 B)False

Question 9

What features should be present in a bill so that it meets promissory requirements?

Accepted Answer

To be negotiable, a bill or note must (1

Question 10

A(n) ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank

Accepted Answer

A)  accommodation endorser 
B)  holder 
C)  assignor 
D)  acceptor 
A)  accommodation endorser 
B)  holder 
C)  assignor 
D)  acceptor

Question 11

A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods.

Accepted Answer

A)  bill of lading 
B)  deed 
C)  letter of credit 
D)  certificate of deposit 
A)  bill of lading 
B)  deed 
C)  letter of credit 
D)  certificate of deposit

Question 12

For which of the following types of endorsements is there a difference in endorsee status between the ULB and common law?

Accepted Answer

A)  conditional endorsement 
B)  collection endorsement 
C)  agency endorsement 
D)  endorsement prohibiting further endorsement 
A)  conditional endorsement 
B)  collection endorsement 
C)  agency endorsement 
D)  endorsement prohibiting further endorsement

Question 13

Explain the role of the advising bank in a letter of credit transaction.

Accepted Answer

Once a bank issues a letter of credit, i

Question 14

Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement?

Accepted Answer

A)  "Pay to Elaine, without recourse, [signed] John" 
B)  "For collection only, [signed] John" 
C)  "Pay to Elaine only, [signed] John" 
D)  "Pay to Elaine, agent for John [signed] John" 
A)  "Pay to Elaine, without recourse, [signed] John" 
B)  "For collection only, [signed] John" 
C)  "Pay to Elaine only, [signed] John" 
D)  "Pay to Elaine, agent for John [signed] John"

Question 15

An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________.

Accepted Answer

A)  conditional endorsement 
B)  restrictive endorsement 
C)  qualified endorsement 
D)  special endorsement 
A)  conditional endorsement 
B)  restrictive endorsement 
C)  qualified endorsement 
D)  special endorsement

Question 16

Which of the following definitions describes an aval of a bill or a note?

Accepted Answer

A)  a person who has physical possession of a bill or note that is payable 
B)  a person who signs a bill or note as a surety and comaker 
C)  a person who endorses a bill or note as a guarantor of an endorsee 
D)  a person who signs a bill or note to lend his or her credit to another party 
A)  a person who has physical possession of a bill or note that is payable 
B)  a person who signs a bill or note as a surety and comaker 
C)  a person who endorses a bill or note as a guarantor of an endorsee 
D)  a person who signs a bill or note to lend his or her credit to another party

Question 17

Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

Accepted Answer

A) True 
 B)False

Question 18

The ________ is the production of an instrument to a party liable to pay on it for that party's acceptance or payment.

Accepted Answer

A)  accommodation of the instrument 
B)  presentment of the instrument 
C)  issuance of the instrument 
D)  endorsement of the instrument 
A)  accommodation of the instrument 
B)  presentment of the instrument 
C)  issuance of the instrument 
D)  endorsement of the instrument

Question 19

An order bill is a bill or note that contains a special endorsement as its last endorsement.

Accepted Answer

A) True 
 B)False

Question 20

The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Accepted Answer

A) True 
 B)False

Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

What is a bearer paper?

What is an endorsement? What are the different types of endorsements?

Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

The common law requires a note to contain the words "promissory note."

A bearer paper is different from an order paper in that a bearer paper ________.

The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n) ________.

Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

What features should be present in a bill so that it meets promissory requirements?

A(n) ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank

A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods.

For which of the following types of endorsements is there a difference in endorsee status between the ULB and common law?

Explain the role of the advising bank in a letter of credit transaction.

Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement?

An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________.

Which of the following definitions describes an aval of a bill or a note?

Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

The ________ is the production of an instrument to a party liable to pay on it for that party's acceptance or payment.

An order bill is a bill or note that contains a special endorsement as its last endorsement.

The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Introduction to International and Comparative Law

State Responsibility and Environmental Regulation

Dispute Settlement

The Multinational Enterprise

Foreign Investment

Money and Banking

Trade in Goods

Services and Labor

Intellectual Property

Sales

Transportation

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Exam 12: Financing

Liability on the instrument for drawers, endorsers, and accommodation endorsers is primary.

What is a bearer paper?

What is an endorsement? What are the different types of endorsements?

Negotiation is the transfer of a bill or note in such a way that the recipient becomes a holder.

The common law requires a note to contain the words "promissory note."

A bearer paper is different from an order paper in that a bearer paper ________.

The bill of exchange that is payable at the time it is presented or at a stated time after presentment is known as a(n) ________.

Tolling is a type of countertrade which involves the exchange of a monetary debt for another form of debt, such as an equity share or an obligation to deliver products, goods, or services.

What features should be present in a bill so that it meets promissory requirements?

A(n) ________ is a person who has physical possession of a bill or note that was drawn, issued, or endorsed to him or her, or to his or her order, or to the bearer, or in blank

A ________ is an instrument issued by a warehouseman or carrier to a shipper that serves as a receipt for goods shipped, as evidence of the contract of carriage, and as a document of title for the goods.

For which of the following types of endorsements is there a difference in endorsee status between the ULB and common law?

Explain the role of the advising bank in a letter of credit transaction.

Which of the following written endorsements would be an example of an endorsement prohibiting further endorsement?

An endorsement in which the endorser does not guarantee that an instrument will be accepted and paid by the drawer or maker is referred to as a ________.

Which of the following definitions describes an aval of a bill or a note?

Parties with secondary liability to an instrument can only be sought after the instrument has been dishonored.

The ________ is the production of an instrument to a party liable to pay on it for that party's acceptance or payment.

An order bill is a bill or note that contains a special endorsement as its last endorsement.

The ULB treats an endorsement prohibiting further endorsements as if it were a qualified endorsement.

Introduction to International and Comparative Law

State Responsibility and Environmental Regulation

Dispute Settlement

The Multinational Enterprise

Foreign Investment

Money and Banking

Trade in Goods

Services and Labor

Intellectual Property

Sales

Transportation

Filters