Question 1

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 2

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

Accepted Answer

A) True 
 B)False

Question 3

On a sheet of paper,Elle writes,without her signature,"I acknowledge that I owe Frank $600,payable out of the proceeds of the sale of my car,a 1995 Honda Civic,which I promise to advertise 'For Sale' next week.Payment is to be made on or before six months from today." What type of instrument is this? Is it nego?tiable? If not,why not?

Accepted Answer

The answer of On a sheet of paper,Elle writes,without her...

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

To be negotiable,an instrument must not be on material that lends itself to permanence.

Accepted Answer

A) True 
 B)False

Question 6

Hayley signs an instrument payable to the order of InstaCredit,Inc. ,that allows a holder to demand payment of the entire amount due,with inter?est,if Hayley fails to make a payment.This instrument is

Accepted Answer

A) negotiable. 
B) nonnegotiable,because a holder can move up the payment date. 
C) nonnegotiable,because moving up the payment date is conditional. 
D) nonnegotiable,because the exact payment date cannot be deter?mined from the face of the instrument.

Question 7

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 8

Shad signs a promissory note payable to Theresa "with interest" on which he conspicuously notes that it is "nonnegotiable." This instru?ment is

Accepted Answer

A) negotiable. 
B) nonnegotiable,because it includes the notation "nonnegotiable." 
C) nonnegotiable,because it does not specify a rate of interest. 
D) nonnegotiable,because the exact amount payable cannot be deter?mined from the face of the instrument.

Question 9

A certificate of deposit is a type of note.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

On a trade acceptance,the drawer is also the drawee.

Accepted Answer

A) True 
 B)False

Question 12

A statement in an instrument that payment can be made only out of a particular fund or source renders it nonnegotiable.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Fact Pattern 24-2A 
Commodity Sales Corporation and Resource Purchasing Company enter a contract for a sale of unprocessed silver.Commodity Sales draws a draft unconditionally ordering Resource Purchasing to pay $50,000 to Commodity Sales's order in sixty days.Resource Purchasing signs and dates the draft.
-Refer to Fact Pattern 24-2A.This instrument is

Accepted Answer

A) a banker's acceptance. 
B) a nonnegotiable instrument. 
C) a promissory note. 
D) a trade acceptance.

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

An undated instrument is not negotiable.

Accepted Answer

A) True 
 B)False

Question 18

A negotiable instrument can function as a substitute for cash.

Accepted Answer

A) True 
 B)False

Question 19

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 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: B: The Function Creation of Negotiable Instruments

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

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

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

To be negotiable,an instrument must not be on material that lends itself to permanence.

Hayley signs an instrument payable to the order of InstaCredit,Inc. ,that allows a holder to demand payment of the entire amount due,with inter?est,if Hayley fails to make a payment.This instrument 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

Shad signs a promissory note payable to Theresa "with interest" on which he conspicuously notes that it is "nonnegotiable." This instru?ment is

A certificate of deposit is a type of note.

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

On a trade acceptance,the drawer is also the drawee.

A statement in an instrument that payment can be made only out of a particular fund or source renders it nonnegotiable.

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

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

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

An undated instrument is not negotiable.

A negotiable instrument can function as a substitute for cash.

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

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