Negotiable Instruments MCQ - Negotiable Instruments MC...

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Negotiable Instruments MC Questions 1. A trade acceptance usually A. Is not regarded as a negotiable instrument under the UCC. B. Must be made payable “to the order of” a named person. C. Is an order to deliver goods to a named person. D. Provides that the drawer is also the payee. 2. Vince Price has in his possession an otherwise negotiable instrument that reads: “I, Waldo, hereby promise to pay to the order of Mark or bearer. ...” Which of the following is true? A. Because the instrument is payable to Mark’s order, it is a draft. B. If Mark endorses the instrument, he assumes potentially greater liability to subsequent transferees than if he transfers it by mere transfer of possession. C. The instrument is nonnegotiable. D. Mark’s signature is required to negotiate the instrument. 3. Shark holds the following: The instrument is
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A. Nonnegotiable even though it is payable on demand. B. Negotiable even though a payment date is not specified. C. Nonnegotiable because the numeric amount differs from the written amount. D. Negotiable because of Abner’s guaranty. 4. Under the Negotiable Instruments Article of the UCC, which of the following requirements must be met for a person to be a holder in due course of a promissory note? A. All prior holders must have been holders in due course. B. The note must be negotiable. C. The holder must be the payee of the note. D. The note must be payable to bearer. 5. Two types of liability, contract and warranty, are imposed on parties to a negotiable instrument. Which of the following statements about liability is false? A. Accommodation parties and agents signing a negotiable instrument on behalf of a principal have either contract or warranty liability. B. Every party, except a qualified endorser, who signs a negotiable instrument is either primarily or secondarily liable for payment of the instrument. C. Any person who transfers a negotiable instrument and receives consideration for it is subject to transfer warranties to any subsequent good-faith transferee unless the seller is transferring a bearer instrument without an endorsement. D. The secondary liability of an endorser of a negotiable instrument to pay upon dishonor applies only to a person entitled to enforce the instrument or to a subsequent endorser and not to prior parties. 6. A secured promissory note would be nonnegotiable if it provided that A. Additional collateral must be tendered if there is a decline in market value of the original collateral. B. Upon default, the maker waives a trial by jury.
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This note was uploaded on 12/06/2009 for the course ACCT REG 5744 taught by Professor Smith during the Spring '09 term at Nova Southeastern University.

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Negotiable Instruments MCQ - Negotiable Instruments MC...

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