Exam 20: Creation and Transfer of Negotiable Instruments

A promissory note is a three-party instrument.

Which of the following is true about an allonge?

A restricted indorsement contains the signature of an indorser and specifies a person (indorsee)to whom the indorser intends the instrument to be payable.

In order to be negotiable,a promissory note must contain an unconditional ________.

What are prepayment and acceleration clauses? How do these clauses help the borrower?

An indorsement is the signature of a signer,other than as a maker,a drawer,or an acceptor,that is placed on an instrument to negotiate it to another person.

An indorsement that does not specify a particular indorsee is known as a ________.

A ________ is a two-party negotiable instrument that is an unconditional written pledge by one party to pay money to another party.

Jumbo CDs are CDs of under $100,000.

Marla owes Mathew $2,500.Mathew wants Marla to pay that amount to Harry to whom Mathew owes the same amount.Mathew draws a negotiable instrument which promises that Marla will pay Harry $2,500.What instrument has Mathew drawn? Explain the different parties involved in the instrument.

Security that lenders sometimes require the maker of a note to post for the repayment of the note is known as collateral.

Agreements in the form of tape recordings and video recordings are considered negotiable instruments.

Emily executes a promissory note in the name of Sonia but does not specify a time for repayment.This promissory note is an example of a(n)________ instrument.

Shawn draws a bearer check that is payable on January 2,2014.This check is an example of a(n)________ instrument.

For a certificate of deposit,the depositor is the maker of the certificate.

One of the benefits of a negotiable instrument is that it can be used as a substitute for the assets owned by the drawer of the instrument.

Which of the following can be claimed by merely having possession of the instrument?

When an indorser includes some specific instruction in an indorsement,it is known as a(n)________ indorsement.

Transfer to subsequent parties by negotiation is accomplished by placing an indorsement on the instrument.

In the context of a draft,a drawee is the party who ________.