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Multiple Choice Quiz
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1
One important characteristic of negotiable instruments is the ease of transferring them to a third party through __________.
A)Arbitration
B)Negotiation
C)Mediation
D)Triangulation
2
__________ paper requires only delivery of the instrument to the holder by the payee, while __________ paper requires delivery and an endorsement.
A)Non-commercial; commercial
B)Order; bearer
C)Bearer; order
D)Commercial; non-commercial
3
A(n) __________ instrument is an instrument payable to cash or whomever is in possession of the instrument.
A)Bearer
B)Payor
C)Time
D)Order
4
The person creating an endorsement is the __________, and the person receiving the endorsement is the __________.
A)Payee, payor
B)Endorsee, endorser
C)Payor, payee
D)Endorser, endorsee
5
An __________, an additional piece of paper for endorsements, can be attached to a negotiable instrument.
A)Allegory
B)Addendum
C)Allonge
D)Add-on
6
__________ endorsements attempt to either limit the transferability of the instrument or control the manner of payment under the instrument.
A)Blank
B)Qualified
C)Special
D)Restrictive
7
Which of the following is not an example of a restrictive endorsement?
A)The endorsement is for deposit or collection only
B)The endorsement prohibits further endorsement
C)The unconditional endorsement
D)The trust endorsement
8
The most common restrictive endorsement is:
A)The endorsement for deposit or collection only
B)The endorsement to prohibit further endorsement
C)The unconditional endorsement
D)The trust endorsement
9
In the event of a misspelled name, the holder may endorse the document with:
A)The misspelled name
B)The holder's actual name
C)Both the misspelled name and the holder's actual name
D)Any and all of the above constitute proper endorsements
10
Which of the following is not a requirement for holder in due course status?
A)The holder must take the instrument gratuitously
B)The party must be a holder of a complete and authentic negotiable instrument
C)The holder must take the instrument in good faith
D)The holder must take the instrument without notice of defects





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