Question 1

On May 1,Doug signs a check that is payable to the order of Employees Credit Corporation and that is dated July 1.This check is

Accepted Answer

A) negotiable. 
B) nonnegotiable,because it is payable to a corporation. 
C) nonnegotiable,because it is postdated. 
D) nonnegotiable,because it is signed by the drawer.

Question 2

For an instrument to be negotiable,it must be in writing.

Accepted Answer

A) True 
 B)False

Question 3

To be negotiable,an instrument must have conditional promises attached to it.

Accepted Answer

A) True 
 B)False

Question 4

Jack signs an instrument that states it is being executed "as per a contract for the sale of three magic beans dated June 1." This instru?ment is

Accepted Answer

A) negotiable. 
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.

Question 5

To finance the purchase of a house from Tuna,Uri signs an instrument promising to pay to "Verity Mortgage Service" $160,000 with interest in installments with the final payment due July 10,2042.To be negotiable,this instrument must include the signature of

Accepted Answer

A) a non-party witness. 
B) Tuna or Tuna's realtor. 
C) Uri. 
D) Verity's chief financial officer.

Question 6

A time draft is payable at a definite future time.

Accepted Answer

A) True 
 B)False

Question 7

On behalf of Digital Cable Company,Elvin signs an instrument in which he promises to deliver 1,000 feet of optic fiber cable to Financiers eBank on March 1.This instrument is

Accepted Answer

A) negotiable. 
B) nonnegotiable,because cable is not a medium of exchange author?ized or adopted by a government as currency. 
C) nonnegotiable,because it does not indicate a specific type of cable. 
D) nonnegotiable,because it does not recite any consideration.

Question 8

Any person in possession of a negotiable instrument payable to bearer is a holder.

Accepted Answer

A) True 
 B)False

Question 9

A certificate of deposit is a type of note.

Accepted Answer

A) True 
 B)False

Question 10

Locke signs a check payable to the order of Metro Bank,filling in the blanks for the amount with the figures "$100" and "One thousand and 00/100 dol?lars." This check is payable in the amount of

Accepted Answer

A) $0. 
B) $100. 
C) $1,000. 
D) $1,100.

Question 11

Rainey signs a promissory note for $10,000 in favor of State University (SU).The note is undated but specifies that it is "payable one month after date." This note is

Accepted Answer

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

Question 12

Rita owes $6,000 in unpaid taxes.In the sand of Seaside Beach,she exe?cutes an instrument for that amount that otherwise meets the re?quire?ments for negotiability.This instrument is likely

Accepted Answer

A) negotiable. 
B) nonnegotiable,because an instrument must be on paper. 
C) nonnegotiable,because sand is not sufficiently permanent. 
D) nonnegotiable,because the government does not appreciate it.

Question 13

To be negotiable,an order to pay must be addressed to only one person.

Accepted Answer

A) True 
 B)False

Question 14

A check is a time instrument because it is payable in due time.

Accepted Answer

A) True 
 B)False

Question 15

To finance the purchase of a car from Giant Auto Sales,Hoppy signs an instrument promising to pay to "Ideal Credit Union" $18,000 with interest in installments with the final payment due May 15,2014.To be negotiable,this instrument must include on its face

Accepted Answer

A) any conditions on the sale of the car. 
B) any conditions to the disbursement of the funds. 
C) any conditions to the repayment of the loan. 
D) no conditions.

Question 16

Quincy draws a check payable to "Replay Stadium" to buy two season tickets to the next year's State College football games.This instrument is

Accepted Answer

A) a bearer instrument. 
B) an order instrument. 
C) valid but nonnegotiable. 
D) void.

Question 17

An instrument is not negotiable if it is not payable at a definite time.

Accepted Answer

A) True 
 B)False

Question 18

Bagels n' Coffee Café issues an instrument in favor of Eatery Supplies,Inc.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.

Question 19

A mere reference in an instrument to another writing makes the promise or order conditional.

Accepted Answer

A) True 
 B)False

Question 20

For an instrument to be negotiable,it must not contain an express promise or order to pay.

Accepted Answer

A) True 
 B)False

Exam 24: The Function Creation of Negotiable Instruments

On May 1,Doug signs a check that is payable to the order of Employees Credit Corporation and that is dated July 1.This check is

For an instrument to be negotiable,it must be in writing.

To be negotiable,an instrument must have conditional promises attached to it.

Jack signs an instrument that states it is being executed "as per a contract for the sale of three magic beans dated June 1." This instru?ment is

To finance the purchase of a house from Tuna,Uri signs an instrument promising to pay to "Verity Mortgage Service" $160,000 with interest in installments with the final payment due July 10,2042.To be negotiable,this instrument must include the signature of

A time draft is payable at a definite future time.

On behalf of Digital Cable Company,Elvin signs an instrument in which he promises to deliver 1,000 feet of optic fiber cable to Financiers eBank on March 1.This instrument is

Any person in possession of a negotiable instrument payable to bearer is a holder.

A certificate of deposit is a type of note.

Locke signs a check payable to the order of Metro Bank,filling in the blanks for the amount with the figures "$100" and "One thousand and 00/100 dol?lars." This check is payable in the amount of

Rainey signs a promissory note for $10,000 in favor of State University (SU) .The note is undated but specifies that it is "payable one month after date." This note is

Rita owes $6,000 in unpaid taxes.In the sand of Seaside Beach,she exe?cutes an instrument for that amount that otherwise meets the re?quire?ments for negotiability.This instrument is likely

To be negotiable,an order to pay must be addressed to only one person.

A check is a time instrument because it is payable in due time.

To finance the purchase of a car from Giant Auto Sales,Hoppy signs an instrument promising to pay to "Ideal Credit Union" $18,000 with interest in installments with the final payment due May 15,2014.To be negotiable,this instrument must include on its face

Quincy draws a check payable to "Replay Stadium" to buy two season tickets to the next year's State College football games.This instrument is

An instrument is not negotiable if it is not payable at a definite time.

Bagels n' Coffee Café issues an instrument in favor of Eatery Supplies,Inc.For the instrument to be negotiable,it must

A mere reference in an instrument to another writing makes the promise or order conditional.

For an instrument to be negotiable,it must not contain an express promise or order to pay.