1) A “certain time” required for negotiability would NOT be satisfied in which instance?

A. Payable on or before January 1, 2003.

B. Payable one week after demand is made.

C. Payable one year form the completion of the building

D. Payable on June 15, 2003 or, if the building is not complete on that date, one year from that date

2) A draft is payable “to the order of Joe Jones or to the bearer.” Sally finds it and demands payment. Should the drawer pay Sally?

A. No, unless Joe Jones’s name is crossed off.

B. No, unless “bearer” is handwritten.

C. Yes, since the word “or” is contained in the instrument, either Jones or Sally, as one in possession of the instrument, will be a holder to whom the order to pay runs.

D. No, the terminology is ambiguous and therefore must be paid only to the order of Joe Jones.

3) Joanne had a paycheck for $54 made out to her. She indorsed it “Joanne” and gave it to Larry, who in return agreed to paint her living room next Saturday.

A. The check is not negotiable.

B. Larry is not a “holder”

C. Larry is not a “holder in due course”

D. Larry has given value for the check.

4) Alice Jones receives a bonus from her boss of $500. She needs cash for her vacation, so she indorses the check to Charlie who gives her $300 cash and an IOU for $200. When Charlie presents the check to Alice’s company for payment, her boss says the check was meant for Alex Jones instead it was all a big mistake. What will Charlie be able to collect form the company.

A. $500

B. $300

C. $420

D. Nothing

5) Jan Arthur writes a $200 check to Bruce Nole who endorses it “Bruce Nole.” Bruce gives the check to Anne Tate who indorses it “without recourse. Anne Tate”. Anne sends the check to Joe Black, MD to pay her medical bill. If the bank refuses to honor the check, Black:

A. can collect only from Jan Arthur

B. can collect only from Jan Arthur or Bruce Nole

C. can collect from the drawer or any endorser whose name appears on the check

D. has no other recourse

6) If a holder presents a note for payment to the maker, which one of the following warranties is given?

A. all endorsements are genuine

B. all signatures are genuine

C. the holder has no knowledge that any endorsements are forged

D. the holder is entitled to enforce the note or is authorized to obtain payment on behalf of the person entitled to enforce the note

7) D has owed C a debt of $500 for two years. If D now signs a promissory note payable to C, the antecedent debt meets the requirement of “Value” in determining C’s status as a holder in due course.

A. True

B. False

8) Which Warranties does a collecting bank give?

A. Warranty of no alteration only.

B. Good title, genuine signatures, no material alteration, do defense good against it, and no knowledge of insolvency.

C. Good title and genuine signatures.

D. A collecting bank does not give any Warranties

9) ABC Bank sent Joanne, a depositor, her January statement on January 31. Within what length of time after this date will Joanne have to notify ABC bank of any instruments containing alterations or unauthorized signatures included in her January statement?

A. 10 days

B. A reasonable period of time, not to exceed 30 days

C. 60 days.

D. Three years

10) Doug takes a $500 check drawn by Gail to Gail’s drawee bank to cash it. Gail has over $10,000 on deposit in her account, but her bank refuses to pay Doug.

A. Doug can sue the bank and demand payment.

B. If the check is over 30 days old, the bank has a right to refuse payment.

C. The bank has incurred a liability to Gail for its improper refusal to pay the check.

D. All of the above