multiple choice questions
83. Ollie negotiates an orderinstrument to Phil by
a. assignment ofits rights under a contract.
b. delivery withany necessary indorsement.
c. making anunconditional promise to pay.
d. presenting it inresponse to a demand by B.
84. Lauren transfers aninstrument to Miguel in a form and by a means that makes Miguel a“holder.” This is
a. aholding.
b. anassignment.
c. negotiation.
d. presentment.
85. Petra signs a checkpayable to Quincy, who indorses the back, gives it to RegionalCredit Union, and receives cash. The transfer of the check fromQuincy to the credit union is
a. anassignment.
b. anegotiation.
c. a payment.
d. a sale.
86. Ivy signs a checkpayable to Jon and gives it to him. Jon indorses the back, andtransfers the check to Ked. To negotiate the check to Luis, Kedmust
a. write “Ked” onthe back.
b. write “pay tothe order of Luis [signed] Ked” on the back.
c. deliver thecheck to Luis.
d. obtain Luis’ssignature on the back.
Fact Pattern 25-A1 (Questions A5–A8 apply)
Rollo obtains a check payable to his order from Simone. Rollosigns the back and gives the check to Trey. Trey writes “Pay toTrey” above Rollo’s signature.
87. Refer to Fact Pattern25-A1. When Trey writes “Pay to Trey” above Rollo’s signature,Rollo’s signature becomes
a. a blankindorsement.
b. a qualifiedindorsement.
c. a specialindorsement.
d. a restrictiveindorsement.
88. Refer to Fact Pattern25-A1. When Trey writes “Pay to Trey” above Rollo’s signature, thecheck becomes
a. a bearerinstrument.
b. an orderinstrument.
c. a promissorynote.
d. a nonnegotiableinstrument.
89. Refer to Fact Pattern25-A1. By writing “Pay to Trey” above Rollo’s signature, Trey
a. avoids therisk of loss from theft of the instrument.
b. relieves himselffrom liability on the instrument.
c. converts thecheck into a nonnegotiable instrument.
d. locks theinstrument into the bank collection process.
90. Refer to Fact Pattern25-A1. After Trey writes “Pay to Trey” above Rollo’s signature,further negotiation of the check
a. requiresRollo’s re-indorsement and delivery.
b. requiresdelivery alone.
c. requires Trey’sindorsement and delivery.
d. is notpossible.
91. Velma transfers a note bysigning it and delivering it to Woz. Woz is
a. a deliveryperson.
b. an indorsee.
c. a notepasser.
d. a promisee.
92. Dora receives a checkfrom Eagle Corporation. Dora indorses the check to First NationalBank by writing “pay to First Nat’l Bank only” and signing hername. This is
a. a blankindorsement.
b. a qualifiedindorsement.
c. a restrictiveindorsement.
d. a specialindorsement.
93. Gina writes and signs acheck payable to “Happy Market.” Ira, Happy’s manager, indorses thecheck “For deposit only.” This is
a. a blankindorsement.
b. a qualifiedindorsement.
c. a restrictiveindorsement.
d. a specialindorsement.
94. To pay for investmentadvice from financial consultants Smith and Jones, Tony signs acheck payable to “Smith or Jones.” A proper indorsement of thecheck is
a. notpossible.
b. “Smith” and“Jones” only.
c. “Smith” only, or“Jones” only, but not “Smith” and “Jones.”
d. “Smith” only, or“Jones” only, or “Smith” and “Jones.”
95. Blythe, an accountantfor Credits & Debits, acquires a negotiable instrument fromEton by promising to pay its face value in thirty days. Blytheacquires the status of an HDC when she
a. acquirespossession of the negotiable instrument.
b. agrees with Etonto buy the negotiable instrument.
c. pays the facevalue due on the instrument.
d. transfers theinstrument to another party.
96. Jill, in good faith and forvalue, gets from Kit a check “payable to the order of bearer.” Jilldoes not know that Kit stole the check. Jill is
a. an HDC.
b. not an HDC,because Kit did not acquire the check for value.
c. not an HDC,because Kit did not acquire the check in good faith.
d. not an HDC,because the check is a bearer instrument.
97. Florencia, who is not aGigaBank customer, attempts to cash a check drawn on the bank. Thecheck is considered dishonored if GigaBank
a. refuses to payit.
b. charges a fee tocash it.
c. asks Florenciafor reasonable identification.
d. asks Florenciato sign a receipt for the payment on the check.
98. Clem gets a $100 check as agift from Daria. Clem crudely increases the amount of the check to$1,00—the alteration is obvious—and transfers it to eReady Sets,Inc., in exchange for a 3D HD TV. eReady deposits the check in itsbank account at First Town Bank. HDCs of this check include
a. Clem, eReady,and First Town Bank.
b. Clem only.
c. eReady and FirstTown Bank only.
d. none of theseparties.
99. Enter answer “A”
100. Enter answer“A”
