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| 1 | |
The maker of a promissory note is only secondarily liable for payment of it. |
| | A) | True |
| | B) | False |
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| 2 | |
An accommodation party is a direct beneficiary of the value given for the instrument. |
| | A) | True |
| | B) | False |
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| 3 | |
An accidental destruction or mutilation of a negotiable instrument discharges the parties to it. |
| | A) | True |
| | B) | False |
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| 4 | |
Tom steals Bob's checkbook and signs Bob's name to a check and cashes it at the bank. Tom is liable on the check. |
| | A) | True |
| | B) | False |
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| 5 | |
A person who negligently signs a negotiable instrument, thus inviting an alteration or unauthorized signature on it, may still assert the alteration or lack of authorization as a defense against payment. |
| | A) | True |
| | B) | False |
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| 6 | |
A person who transfers a negotiable instrument to someone else and for consideration makes no warranties to the immediate transferee. |
| | A) | True |
| | B) | False |
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| 7 | |
The Code allows any indorsement in the name of a fictitious payee to be effective as the payee's indorsement in favor of any person that pays the instrument in good faith or takes it for value or collection. |
| | A) | True |
| | B) | False |
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| 8 | |
In which of the following is the negotiable instrument discharged? |
| | A) | Ed lends Amy $1,000. Amy gives Ed a promissory note for $1,000. Ed tears the note because he does not want Amy to have to pay him back. |
| | B) | Joe lends Bob $1,000. Bob gives Joe a promissory note for $1,000. Joe accidentally destroys the note while he is going through papers on his desk. |
| | C) | Kim gives Bill a promissory note for $1,000. Bill negotiates it to Deb. Deb changes the $1,000 to read $10,000. |
| | D) | A and C |
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| 9 | |
A person who transfers a negotiable instrument to someone else and for consideration makes which of the following warranties to the immediate transferee? |
| | A) | The signatures are authentic and authorized. |
| | B) | The instrument has not been altered. |
| | C) | both A and B |
| | D) | None of the above -- there are no such warranties. |
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| 10 | |
A person who presented a check for payment or acceptance and the drawee pays or accepts the draft, the person obtaining the payment warrants that: |
| | A) | the draft has not been altered. |
| | B) | the warrantor has no knowledge that the signature of the drawer of the draft has not been authorized. |
| | C) | both A and B |
| | D) | None of the above |
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