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Chapter Quiz
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1
Commercial paper is essentially a contract for the payment of money.
A)True
B)False
2
Checks from a bank are an example of a negotiable instrument.
A)True
B)False
3
A cashier's check is a draft on which the drawer and drawee are the same bank
A)True
B)False
4
Checks with ambiguous terms are void.
A)True
B)False
5
A holder in due course is a person who has possession of a negotiable instrument.
A)True
B)False
6
A negotiable instrument does not require a signature of the person undertaking to pay.
A)True
B)False
7
An instrument is not negotiable unless the promise or order is unconditional.
A)True
B)False
8
Which of the following statements about promissory notes is true?
A)An example of a promissory note is a check.
B)A promissory note is a credit instrument.
C)Another name for a promissory note is a certificate of deposit.
D)All of the above
9
Which of the following statements regarding a "holder in due course" is true?
A)A holder in due course must have good title to the instrument.
B)A holder in due course is not subject to the defense of duress.
C)A holder in due course is not affected by evidence of forgery on the instrument.
D)All of the above
10
A promise or order is "payable on demand" if:
A)it states that it is payable on "demand"
B)does not state any time for payment
C)Both A and B
D)None of the above





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