1. The holder or holder in due course (HDC) of a promissory note made by a minor is entitled to payment under which of the following conditions?

A)If the minor does not assert the defense that he or she is under the statutory age for making a contract, a holder or HDC is entitled to payment.

B)The holder or HDC did not know the maker was a minor.

C)The minor's signature is legitimate.

D) The holder presents the promissory note to the minor's parents for payment.

2. Which of the following is true about signature liability?

A) Any party, without exception, who signs the instrument is primarily or secondarily liable for payment on the instrument.

B) Only the party who is the maker or drawer has signature liability.

C) Only a maker or a drawee has signature liability on a negotiable instrument.

D) Any party (except a qualified indorser) who signs the instrument has either primary or secondary liability for payment on the instrument.

3.What does it mean to have primary liability on a negotiable instrument?

A)Primary liability means that a holder in due course can collect from any party who signed the instrument.

B) As soon as a party signs the instrument as a maker or accepts the instrument as a drawee, they are the first to become liable for payment.

C)Primary liability means that a maker or drawer is liable for payment only until the instrument is indorsed.

D)Primary liability means that as soon as a party signs the instrument as a maker or accepts the instrument as a drawee, they become unconditionally liable for payment, and they are not allowed any defense.

4. For a party to be subject to contractual liability on a negotiable instrument, what must occur?

A) The party must sign the instrument.

B) An indorsement must contain the words "without recourse."

C) A drawee must require the proper identification of a payee.

D) A holder must present the instrument for payment.

5. What happens when a negotiable instrument has either been canceled by the holder or the holder is paid in full?

A) discharge of liability for the payor

B) only warranty liability remains

C) discharge of liability for all parties

D) accord and satisfaction

6.Personal defenses to liability for payment on a negotiable instrument are:

A) available only for warranty liabilities.

B) available only to parties who have signed the instrument.

C) effective against any holder.

D) effective against a holder, unless they are a holder in due course.

7. Which of the following are correct statements about the writing requirement of a negotiable instrument? Choose 2 answers.

A) may be a typed, printed, or handwritten document

B) must be typed or printed using ink

C) must be on paper

D) may be any intentional reduction to a tangible form

8.Which of the following meets the signature requirement on a negotiable instrument?

A) a symbol or mark used by the maker or drawer with the intent to authenticate the instrumen

B) only the printed or handwritten signature of the maker or drawer

C) only the full legal signature of the maker or drawer

D) an "X" is sufficient if witnessed by another person

9. Which of the following will meet the requirement for a negotiable instrument to contain an unconditional promise or order to pay?

A) The instrument may not contain any condition to payment and may not refer to another writing that governs the payment.

B) The instrument itself cannot contain any condition to payment, but it may refer to another writing that does.

C) The instrument may refer to another writing that contains rights or obligations related to the promise or order.

D) The amount promised must be certain, but there may be conditions related to how it is paid.

10. Which of the following elements of a negotiable instrument are required to be definite? Choose 2 answers.

A) full legal signature of the maker or drawer

B) the words "payable on demand" if there is no time certain for payment

C) the amount

D) the promise or order to pay