Question 1

Visible evidence that a signature on a check was forged will disqualify a purchaser from HDC status.

Accepted Answer

A) True 
 B)False

Question 2

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​

Accepted Answer

A)   ​refuses to pay it.
B)   ​charges a fee to cash it.
C)   ​asks Talia for reasonable identification.
D)   ​asks Talia to sign a receipt for the payment on the check.E) A) and B)
F) B) and D)

Question 3

A blank indorsement can consist of a mere signature.

Accepted Answer

A) True 
 B)False

Question 4

An indorser who does not wish to be liable on an instrument can use a qualified indorsement.

Accepted Answer

A) True 
 B)False

Question 5

Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.​

Accepted Answer

A) True 
 B)False

Question 6

A person who receives an instrument as a gift automatically possesses the rights of a holder in due course.

Accepted Answer

A) True 
 B)False

Question 7

Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument​

Accepted Answer

A)   for valuable consideration under a contract.​
B)   ​in such form that the transferee becomes a holder.
C)   ​pursuant to preliminary contract discussions.
D)   ​without the payment of a recognized medium of exchange.E) B) and C)
F) A) and B)

Question 8

Berton transfers a draft by signing it and delivering it to Cormac. Berton is​

Accepted Answer

A)   ​an indorser.
B)   ​an indorsee.
C)   ​a drafter.
D)   ​a promisor.E) B) and C)
F) None of the above

Question 9

A holder takes an instrument for value by promising to perform in the future.

Accepted Answer

A) True 
 B)False

Question 10

Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU) , and receives cash. The transfer of the check from Bess to CCU is​

Accepted Answer

A)   ​an assignment.
B)   ​a negotiation.
C)   ​none of the choices.
D)   ​a sale.E) A) and D)
F) All of the above

Question 11

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​

Accepted Answer

A)   ​an HDC.
B)   ​not an HDC, because Wren did not acquire the check for value.
C)   ​not an HDC, because Wren did not acquire the check in good faith.
D)   ​not an HDC, because the check is a bearer instrument.E) A) and C)
F) All of the above

Question 12

Estes receives a check from Fleet Trucking Corporation. On the back of the check, Estes writes "pay to Garden Valley Bank only" and signs his name. This is​

Accepted Answer

A)   ​a blank indorsement.
B)   ​a qualified indorsement.
C)   ​a restrictive indorsement.
D)   ​a special indorsement.E) All of the above
F) B) and D)

Question 13

Gwen signs a check payable to Hart and gives it to him. Hart indorses the back, and transfers the check to Ingrid. To negotiate the check to Jaime, Ingrid must​

Accepted Answer

A)   ​write "Ingrid" on the back.
B)   ​write "pay to the order of Jaime [signed] Ingrid" on the back.
C)   ​deliver the check to Jaime.
D)   ​obtain Jaime's signature on the back.E) A) and B)
F) A) and C)

Question 14

When an instrument is transferred by negotiation, the transferee becomes a holder.

Accepted Answer

A) True 
 B)False

Question 15

Rochelle fraudulently induces Sybil to sign a note. Rochelle sells the note to Terry, who does not know of the fraud and takes the note for value and in good faith, and thus becomes an HDC. Terry sells the note to Ulrich, who sells the note back to Rochelle. Does Rochelle acquire Terry's HDC rights in the note?

Accepted Answer

No, Rochelle does not acquire Terry's HD...

Question 16

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​

Accepted Answer

A)   ​none of the choices.
B)   ​an assignee.
C)   ​an ordinary holder.
D)   ​an ordinary holder in due course.E) A) and C)
F) C) and D)

Question 17

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

Accepted Answer

A) True 
 B)False

Question 18

The good faith requirement applies to both the holder and the transferor.

Accepted Answer

A) True 
 B)False

Question 19

A bearer instrument can be converted into an order instrument through indorsement.

Accepted Answer

A) True 
 B)False

Question 20

Ryan negotiates an order instrument to Selina by​

Accepted Answer

A)   ​delivery with an assignment of his rights under a contract.
B)   ​delivery with any necessary indorsement.
C)   ​delivery alone.
D)   ​presenting it in response to a demand by Selina.E) C) and D)
F) B) and D)

Exam 26: Transferability and Holder in Due Course

Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.

Correct Answer
verified

A holder takes an instrument for value by promising to perform in the future.

Correct Answer
verified

A bearer instrument can be converted into an order instrument through indorsement.

Correct Answer
verified

Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU) , and receives cash. The transfer of the check from Bess to CCU is

Correct Answer
verified

Gwen signs a check payable to Hart and gives it to him. Hart indorses the back, and transfers the check to Ingrid. To negotiate the check to Jaime, Ingrid must

Correct Answer
verified

A person who receives an instrument as a gift automatically possesses the rights of a holder in due course.

Correct Answer
verified

Estes receives a check from Fleet Trucking Corporation. On the back of the check, Estes writes "pay to Garden Valley Bank only" and signs his name. This is

Correct Answer
verified

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

Correct Answer
verified

When an instrument is transferred by negotiation, the transferee becomes a holder.

Correct Answer
verified

Correct Answer
verified
No, Rochelle does not acquire Terry's HD...
View Answer

Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument

Correct Answer
verified

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

Correct Answer
verified

Ryan negotiates an order instrument to Selina by

Correct Answer
verified

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

Correct Answer
verified

Berton transfers a draft by signing it and delivering it to Cormac. Berton is

Correct Answer
verified

An indorser who does not wish to be liable on an instrument can use a qualified indorsement.

Correct Answer
verified

The good faith requirement applies to both the holder and the transferor.

Correct Answer
verified

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

Correct Answer
verified

Visible evidence that a signature on a check was forged will disqualify a purchaser from HDC status.

Correct Answer
verified

A blank indorsement can consist of a mere signature.

Correct Answer
verified

Exam 26: Transferability and Holder in Due Course

Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.​

Correct AnswerverifiedShow Answer

A holder takes an instrument for value by promising to perform in the future.

Correct AnswerverifiedShow Answer

A bearer instrument can be converted into an order instrument through indorsement.

Correct AnswerverifiedShow Answer

Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU) , and receives cash. The transfer of the check from Bess to CCU is​

Correct AnswerverifiedShow Answer

Gwen signs a check payable to Hart and gives it to him. Hart indorses the back, and transfers the check to Ingrid. To negotiate the check to Jaime, Ingrid must​

Correct AnswerverifiedShow Answer

A person who receives an instrument as a gift automatically possesses the rights of a holder in due course.

Correct AnswerverifiedShow Answer

Estes receives a check from Fleet Trucking Corporation. On the back of the check, Estes writes "pay to Garden Valley Bank only" and signs his name. This is​

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

When an instrument is transferred by negotiation, the transferee becomes a holder.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo, Rochelle does not acquire Terry's HD...View AnswerShow Answer

Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument​

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

Ryan negotiates an order instrument to Selina by​

Correct AnswerverifiedShow Answer

An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

Correct AnswerverifiedShow Answer

Berton transfers a draft by signing it and delivering it to Cormac. Berton is​

Correct AnswerverifiedShow Answer

An indorser who does not wish to be liable on an instrument can use a qualified indorsement.

Correct AnswerverifiedShow Answer

The good faith requirement applies to both the holder and the transferor.

Correct AnswerverifiedShow Answer

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​

Correct AnswerverifiedShow Answer

Visible evidence that a signature on a check was forged will disqualify a purchaser from HDC status.

Correct AnswerverifiedShow Answer

A blank indorsement can consist of a mere signature.

Correct AnswerverifiedShow Answer

Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Allie signs a check payable to Bess, who indorses the back, gives it to County Credit Union (CCU) , and receives cash. The transfer of the check from Bess to CCU is

Correct Answer
verified

Gwen signs a check payable to Hart and gives it to him. Hart indorses the back, and transfers the check to Ingrid. To negotiate the check to Jaime, Ingrid must

Correct Answer
verified

Correct Answer
verified

Estes receives a check from Fleet Trucking Corporation. On the back of the check, Estes writes "pay to Garden Valley Bank only" and signs his name. This is

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
No, Rochelle does not acquire Terry's HD...
View Answer

Mort negotiates an instrument to Nadia. Negotiation is the transfer of an instrument

Correct Answer
verified

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

Correct Answer
verified

Ryan negotiates an order instrument to Selina by

Correct Answer
verified

Correct Answer
verified

Berton transfers a draft by signing it and delivering it to Cormac. Berton is

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified