____ 1. In a sale of appliances to Home Furnishings Store, Interstate Products, Inc. (IPI), draws an instrument that orders Home Furnishings to pay $150,000 to the order of IPI in thirty days. Home Furnishings accepts the instrument by signing and dating the face of it. This is

a.	a certificate of deposit.
b.	a bearer bond.
c.	a trade acceptance.
d.	a international letter of credit.

____ 2. To obtain his business license, Alan writes a check to the appropriate state agency. Alan is

a.	the drawee.
b.	the drawer.
c.	the indorser.
d.	the payee.

____ 3. Tyler signs an unconditional promissory note payable to United Freight Company. Vince attempts to collect payment on United's behalf. This note is

a.	a negotiable instrument payable to any holder.
b.	a negotiable instrument payable to a specific payee.
c.	a negotiable instrument payable to bearer.
d.	a nonnegotiable instrument.

____ 4. Jane orally promises to pay $400 to Ken. This is

a.	a negotiable instrument.
b.	a nonnegotiable instrument, because it is not in writing.
c.	a nonnegotiable instrument, because $400 is under the Statute of Frauds.
d.	a nonnegotiable instrument, because it does not recite consideration.

____ 5. Jim owes $5,000 in unpaid taxes. On the flank of his quarter horse, he executes an instrument for that amount that otherwise meets the requirements for negotiability. This instrument is likely

a.	negotiable.
b.	nonnegotiable, because an instrument must be on paper.
c.	nonnegotiable, because a quarter horse is not freely transferable.
d.	nonnegotiable, because the government does not appreciate it.

____ 6. To borrow money to finance the start-up of his business, Bob executes an instrument in favor of City Bank. For the instrument to be negotiable, the signature must be

a.	anywhere on the instrument.
b.	anywhere on the lower half of the instrument only.
c.	in the lower left-hand corner of the instrument only.
d.	in the lower right-hand corner of the instrument only.

____ 7. Don, the chief executive officer of Epsilon Products, Inc., signs an instrument by placing his thumbprint on it. This instrument is

a.	negotiable.
b.	nonnegotiable, because a thumbprint does not state the signer's name.
c.	nonnegotiable, because a thumbprint implies a lack of binding intent.
d.	nonnegotiable, because a thumbprint is not a signature.

____ 8. Kevin, the owner of Livestock Ranch Corporation, signs an instrument that includes the phrase "payment for this note will be made from the proceeds of next year's stock sale." This instrument is

a.	negotiable.
b.	nonnegotiable, because information about the sale must be obtained from another source.
c.	nonnegotiable, because it states an express condition to payment.
d.	nonnegotiable, because the reasons for the note are not clear.

____ 9. On behalf of First-Rate Capital, Inc., Greg signs an instrument promising to pay $5,000 in gold to Hot Funds, Inc., on May 15. This instrument is

a.	negotiable.
b.	nonnegotiable, because gold is not a medium of exchange authorized or adopted by a government as currency.
c.	nonnegotiable, because it does not recite any consideration.
d.	nonnegotiable, because it is for an amount of $500 or more.

____ 10. Opal signs a promissory note payable to the order of Payday Loan Company. The note states that it is payable "with interest at the legal rate." This note is

a.	negotiable.
b.	nonnegotiable, because it does not specify a rate of interest.
c.	nonnegotiable, because it is a promissory note.
d.	nonnegotiable, because it is payable only with interest.

____ 11. Maria signs an instrument payable to the order of National Loans, Inc., "on or before" June 15. This instrument is

a.	negotiable.
b.	nonnegotiable, because the maker can move up the payment date.
c.	nonnegotiable, because moving up the payment date is optional.
d.	nonnegotiable, because the exact payment date cannot be determined from the face of the instrument.

____ 12. Flo executes a promissory note in favor of General Credit Corporation that allows a holder to demand payment of the entire amount due, with interest, if Flo fails to make a payment. This is

a.	a codependency clause.
b.	an acceleration clause.
c.	an extension clause.
d.	a surety clause.

____ 13. Wendy signs a check payable "to the order of X" and gives it to Yves. This check is

a.	negotiable.
b.	nonnegotiable, because Yves is not "X."
c.	nonnegotiable, because it does not indicate a specific payee.
d.	nonnegotiable, because it was executed as a joke.

____ 14. Quinn signs an instrument payable to the order of Payday Loan Company that states, "The maker of this note at the date of maturity, May 1, 2007, can extend the time of payment, but for no more than a reasonable time." This instrument is

a.	negotiable.
b.	nonnegotiable, because it includes an extension clause.
c.	nonnegotiable, because it is not payable within a definite time.
d.	nonnegotiable, because it is payable to Payday Loan Company.

____ 15. Will signs a check payable to "X" and gives it to Yvonne. This check is

a.	negotiable.
b.	nonnegotiable, because Yvonne is not "X."
c.	nonnegotiable, because it does not indicate a specific payee.
d.	nonnegotiable, because it was executed as a joke.