1. Lewis makes a note payable to Milly. She indorses the back of the note and negotiates it to Negotiable Investments, Inc. Primarily liable on the note is
2. a. Lewis.
3. b. Negotiable Investments.
4. c. none of the choices.
5. d. Milly.
8. Petra signs a check payable to Quentin, who indorses the back, gives it to Regional Credit Union (RCU), and receives cash. The transfer of the check from Quentin to RCU is
9. a. an assignment.
10. b. a sale.
11. c. a negotiation.
12. d. a payment.

1. Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is
2. a. not negotiable, because it is a promissory note.
3. b. not negotiable, because it does not specify a rate of interest.
4. c. negotiable.
5. d. not negotiable, because it is payable only with interest.

1. Gwen deposits $5,000 with Home State Bank on July 1, 2016. Home State Bank promises to repay Gwen the $5,000 plus 3 percent annual interest on July 1, 2021. Home State Bank issued to Gwen
2. a. a certificate of deposit.
3. b. a check.
4. c. a nonnegotiable instrument.
5. d. a trade acceptance.

1. Plumbing & Pipes Supply Company issues a promissory note as a demand instrument with a due date of October 5. QuikPay Loan Company accepts the note. QuikPay has notice that the note is overdue if the firm takes the note
2. a. at any time.
3. b. on October 5.
4. c. after October 5.
5. d. before October 5.

1. Ray pays Slim in good faith for a promissory note. Slim warrants that the note has not been altered. This is
2. a. a transfer warranty.
3. b. a signature warranty.
4. c. a breach of warranty.
5. d. a presentment warranty.

1. Avril receives a payroll check from Business Solutions, Inc., and indorses it by signing her name on the back of the check. This is
2. a. a qualified indorsement.
3. b. a restrictive indorsement.
4. c. a special indorsement.
5. d. a blank indorsement.

1. Barry draws a check payable to "Cash" and presents it to Dollars & Sense store for payment. This instrument is
2. a. valid but nonnegotiable.
3. b. a bearer instrument.
4. c. void.
5. d. an order instrument.

1. Lindsey, an accountant for Madison & Monroe, acquires a negotiable instrument from Norma by promising to pay its face value in thirty days. Lindsey acquires the status of an HDC when she
2. a. promises to pay the face value due on the instrument.
3. b. transfers the instrument to another party.
4. c. acquires possession of the negotiable instrument.
5. d. pays the face value due on the instrument.
8. Pedro signs an instrument that states it is being executed "as per a contract for the sale of a case of apples dated May 1." This instrument is
9. a. not negotiable, because banks cannot easily process commodities.
10. b. negotiable.
11. c. not negotiable, because it refers to an express contract.
12. d. not negotiable, because it includes the specific date of a contract.

1. Talia, who is not a Urban Bank customer, attempts to cash a check drawn on the bank. The check is considered dishonored if Urban Bank
2. a. asks Talia to sign a receipt for the payment on the check.
3. b. asks Talia for reasonable identification.
4. c. charges a fee to cash it.
5. d. refuses to pay it.

1. Emily writes and signs a check payable to "Festival Cinema." Georg, Festival's manager, indorses the check "For deposit only." This is
2. a. a restrictive indorsement.
3. b. a blank indorsement.
4. c. a qualified indorsement.
5. d. a special indorsement.

1. Vicenzo, in good faith and for value, gets from Wren a check "payable to the order of bearer." Vicenzo does not know that Wren stole the check. Vicenzo is
2. a. not an HDC, because Wren did not acquire the check in good faith.
3. b. not an HDC, because Wren did not acquire the check for value.
4. c. not an HDC, because the check is a bearer instrument.
5. d. an HDC.

1. Sergio makes a gift of a check to Todd who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Todd is
2. a. an ordinary holder.
3. b. none of the choices.
4. c. an ordinary holder in due course.
5. d. an assignee.

1. O'Malley negotiates an order instrument to Phil by
2. a. anassignment of O'Malley's rights under a contract.
3. b. making an unconditional promise to pay.
4. c. presenting it in response to a demand by Phil.
5. d. a delivery to Phil with any necessary indorsement.

1. Lenora signs a note "payable to the order of Medical Account Collection Agency." Unless Lenora has a valid defense against payment, Lenora's liability on this note is
2. a. imposed only after payment is demanded.
3. b. postponed until the note is dishonored by the payee.
4. c. suspended until payment is due.
5. d. immediate.

1. On the back of a check payable to Nero, he writes "Pay to Odell, without recourse" and signs it. This
2. a. relieves Odell of liability on the check.
3. b. does not effect the check's negotiability or any party's liability.
4. c. renders the check nonnegotiable.
5. d. relieves Nero of liability on the check.

1. Builders Exchange, Inc., issues an instrument in favor of Custom Construction Company.For the instrument to be negotiable, it must
2. a. be signed by the payee.
3. b. be payable on demand or at a specific time.
4. c. be a conditional promise or order to pay.
5. d. recite the consideration given in exchange for it.

1. GR8 Products, Inc., warrants its goods to be free of defects. Heck issues an instrument to obtain goods from GR8 that prove defective. With respect to payment on the instrument, Heck
2. a. is liable only to a subsequent holder of the instrument.
3. b. has a personal defense against it.
4. c. has a universal defense against it.
5. d. cannot avoid it.