MULTIPLE CHOICE QUESTIONS (1-471

1. The following question concertiyan instrument which Alex & Co. has'in its possession:

October 5, 1982

: To: Henry Futterman Suppliers

281 Cascade Boulevard

Spokane. Washington 99208

5950.00

Pay to the order of Alex & Co.

Nine hundred fifty and 00/100 dollars one month after acceptance

ATex & Co:

By Charked Qlup

Managing Partner

Alex & Co. +

264 Liberty: Avenue

Philadelphia; Pa. 19117

Accepted by

Truer Lettersa,

Henry Futterman Suppliers

Date: October 15, 1982

The above instrument is

A. Nonnegotiable since the payee is also the drawer.

B. A time promissory note.

C. A trade acceptance which imposes primary liability upon Henry Futterman Suppliers after acceptance.

D. a negotiable investment security under the uniform commercial code

A negotiable investment security under the

Uniform Commercial Code.

2. An instrument complies with the requirements for negotiability contained in the Commercial Paper Article of the Uniform Commercial Code. The instrument contains language expressly acknowledging the receipt of $10,000 by the First Bank of Grand Rapids and an agreement to repay principal with interest at 15% one year from date. This instrument is

A. Nonnegtiable because of the additional language.

b. A negotiable certificate of deposit.

C.A banker's draft.

d A banker's acceptance.

3. The following question concerns an instrument which Alex & Co, has in its possession:

No. 003

Nov.1. 1982 62-105

251

Pay to the order of Alex & Co.

51,000.00

One Thousand and 00/100

Dollars

Ten davs after presentment.

Security Trust Company

Austin, Texas Memo: For purchases of securities

Zechat dois

Herbert Stein

The above instrument is

A. Nonnegotiable.

B. A draft

c. A trade acceptance.

D. Acheck.

4. note:

Ash Company has in its possession the following

October 15, 1982

1, Joseph Gorman, promise to pay or deliver to Harold Smalley or to his order ONE THOUSAND DOLLARS ($1,000) or at his option to deliver an amount of stock in the Sunrise Corporation which, on the due date of this instrument, is worth not less than ONE THOUSAND DOLLARS (S1,000). This note is due and payable on the 1st of November, 1982.

Jaseph Gorman

This note is a.

A.. Not commercial paper, but instead a negotiable investment security.

B. negotiable promissory note since it is payable to Smalley's order and contains an unconditional promise to pay $1,000 if the holder so elects

C. Nonnegtiobale since ut give smaller the option to take stock instead of cash

D. nontransferable

answer all questions