2. Rau obtains a loan from Security Funds and signs a note for the amount payable to the lender. Security Funds indorses the note and sells it to Tomas. With the intent to cancel Rau's obligation on the note, Tomas writes "Paid" across its face. This discharges the liability of

a. no one.

b. Security Funds only.

c. Rau only.

d. Rau and Security Funds.

5. Gary writes a check drawn on Hill Bank for $400 "payable to Ian" on May 1. Gary dies on May 3. Ian presents the check to the bank on May 5. Unaware of Gary's death, the bank

a. must certify the check.

b. may pay the check.

c. must consult with Gary's heirs before paying the check.

d. can do nothing until Ian claims an interest in the account.

19. Special requirements for the form and content of negotiable instruments are imposed by

a. the Uniform Commercial Code.

b. the Lex Mercatoria as codified in England.

c. rules developed by merchants in the medieval world.

d. none of the choices.

20. A certificate of deposit (CD) is issued when Lo-Risk Invest LLC deposits funds with Money Bank on the bank's promise to repay the funds, with interest, on a certain date. Lo-Risk cannot withdraw the funds before the date of maturity because

a. a CD cannot be sold or negotiated to a third party before maturity.

b. a CD is not a three-party instrument.

c. the bank is both the issuer of the instrument and the drawee.

d. a CD is a time deposit

23. Farmers Field LLC negotiates a bearer instrument to Grain Co-op by delivery

a. with an assignment of its rights under a contract.

b. without more.

c. with formal presentment in response to a demand by the payee.

d. with any necessary indorsement.