Question 1

________ is the original generic term for the documents used as payments to facilitate commercial transactions.

Accepted Answer

Commercial paper is the original generic term used to describe documents that facilitate commercial transactions by serving as a form of payment. These are unsecured, short-term debt instruments issued by corporations to finance their operations.

Question 2

With a demand instrument, the ________ can demand actual payment at any time.

Accepted Answer

The payee or subsequent holder of a demand instrument has the right to demand payment at any time, as per the terms of the instrument.

Question 3

Which of the following is true regarding simple contracts as compared to negotiable instruments?

Accepted Answer

Simple contracts can be assigned to an assignee, whereas negotiable instruments are specifically designed to be easily transferable or negotiated to a holder. This distinction highlights the ease of transfer and the legal protections afforded to holders of negotiable instruments compared to parties involved in simple contracts.

Question 4

Vivian purchases a certificate of deposit for $10,000 at Right Now Bank. What does the certificate of deposit give Vivian?

Accepted Answer

Certificates of Deposit (CDs) are time deposits offered by banks that pay interest. They give the holder the right to collect the principal amount plus accrued interest at a predetermined future date, making option A correct.

Question 5

If an instrument fails to qualify as a negotiable instrument, which of the following statements is true?

Accepted Answer

Failure to qualify as a negotiable instrument does not automatically mean the instrument fails to be a good contract. The criteria for being a negotiable instrument are specific and distinct from the criteria for a contract to be valid and enforceable.

Question 6

When an instrument fails to meet the technical requirements necessary to qualify as a negotiable instrument, which of the following statements is true?

Accepted Answer

An instrument that fails to meet the technical requirements for negotiability may still be enforced as a contract if the parties involved intended to enter into a contract and the instrument meets the general requirements for contract enforceability. Negotiability adds specific rights and protections, but the absence of negotiability does not automatically invalidate the underlying agreement.

Question 7

Belinda asks Jordan to explain what an example of a negotiable instrument is for their upcoming test. Which of the following should Jordan tell Belinda are examples of negotiable instruments?

Accepted Answer

Negotiable instruments include checks, drafts, certificates of deposit, and promissory notes. These are formal financial instruments that are written and signed, promising to pay a specified sum of money to a specified person or the bearer under specific terms.

Question 8

Analynd issues a note to Baliee indicating a specified date of payment in which to pay the note. This is an example of a(n) ________ instrument.

Accepted Answer

A time instrument specifies a future date for payment, unlike a demand instrument which requires payment upon demand.

Question 9

The term that stands for the time it takes a check to go through the traditional check-clearing process and be paid is known as ________.

Accepted Answer

The term "float" refers to the time period between when a check is written and when it is actually cleared and the funds are deducted from the payer's account. This process involves the check's journey through the banking system until it is paid by the payer's bank.

Question 10

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Accepted Answer

A cashier's check is a type of draft where the drawer and drawee are the same bank or branches of the same bank. It is issued by the bank itself, guaranteeing the payment.

Question 11

Documents used as payments to facilitate commercial transactions were labeled as negotiable instruments under ________.

Accepted Answer

Negotiable instruments are governed by Article 3 of the Uniform Commercial Code (UCC), which provides a framework for the use of documents like checks, drafts, and notes as means of payment in commercial transactions.

Question 12

A(n) ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

Accepted Answer

A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or to the order of a person or the bearer.

Question 13

A certificate of deposit is a note of ________.

Accepted Answer

A certificate of deposit is a type of savings account found at banks and credit unions that pays a fixed interest rate on money deposited. In essence, it is a promissory note issued by a bank.

Question 14

Which of the following is true regarding the status of negotiable instruments in regard to international transactions?

Accepted Answer

The definitions and regulations regarding negotiable instruments can vary significantly from one country to another, reflecting differences in legal systems and commercial practices. There is no single global authority that defines and enforces concepts of negotiability for all countries.

Question 15

A substitute for cash, or ________, is a written document containing the signature of the creator that makes an unconditional promise to pay.

Accepted Answer

A negotiable instrument is a written document that promises payment to a specified person or assignee. It is a substitute for cash and includes features like being unconditional and containing the signature of the person who is making the promise.

Question 16

Which is the correct term for a promise made by a bank to pay a payee a certain amount of money at a future time?

Accepted Answer

A certificate of deposit is a promise made by a bank to pay a payee a certain amount of money at a future time.

Question 17

The ancient Lex mercatoria, or law of merchants, of England recognized that agreements could be paid for with documents that promised payment and that these documents themselves could then be circulated ________.

Accepted Answer

The Lex mercatoria recognized that documents promising payment could circulate as a substitute for money, allowing for more fluid commercial transactions without the need for physical currency exchange.

Question 18

As a general rule under UCC 3-103(a)(9), the promise or order to pay within a negotiable instrument must be ________ and not ________.

Accepted Answer

Under UCC 3-103(a)(9), the promise or order to pay within a negotiable instrument must be specified and not implied, ensuring clarity and enforceability.

Question 19

Which of the following are not associated with an instrument known as a traveler's check?

Accepted Answer

Traveler's checks are designed for use by travelers and are accepted worldwide, not limited to countries that use paper currency. They are a secure way to carry money when traveling, as they can be replaced if lost or stolen, and are not restricted by the type of currency used in a country.

Question 20

A negotiable instrument is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain of money ________.

Accepted Answer

Negotiable instruments are characterized by the promise or order to pay a specific amount of money either at a determinable future time or on demand, making option B the correct choice.

Quiz 26: Negotiable Instruments: Negotiability and Transferability

________ is the original generic term for the documents used as payments to facilitate commercial transactions.

With a demand instrument, the ________ can demand actual payment at any time.

Which of the following is true regarding simple contracts as compared to negotiable instruments?

Vivian purchases a certificate of deposit for $10,000 at Right Now Bank. What does the certificate of deposit give Vivian?

If an instrument fails to qualify as a negotiable instrument, which of the following statements is true?

When an instrument fails to meet the technical requirements necessary to qualify as a negotiable instrument, which of the following statements is true?

Belinda asks Jordan to explain what an example of a negotiable instrument is for their upcoming test. Which of the following should Jordan tell Belinda are examples of negotiable instruments?

Analynd issues a note to Baliee indicating a specified date of payment in which to pay the note. This is an example of a(n) ________ instrument.

The term that stands for the time it takes a check to go through the traditional check-clearing process and be paid is known as ________.

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Documents used as payments to facilitate commercial transactions were labeled as negotiable instruments under ________.

A(n) ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

A certificate of deposit is a note of ________.

Which of the following is true regarding the status of negotiable instruments in regard to international transactions?

A substitute for cash, or ________, is a written document containing the signature of the creator that makes an unconditional promise to pay.

Which is the correct term for a promise made by a bank to pay a payee a certain amount of money at a future time?

The ancient Lex mercatoria, or law of merchants, of England recognized that agreements could be paid for with documents that promised payment and that these documents themselves could then be circulated ________.

As a general rule under UCC 3-103(a) (9) , the promise or order to pay within a negotiable instrument must be and not .

Which of the following are not associated with an instrument known as a traveler's check?

A negotiable instrument is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain of money ________.

Quiz 26: Negotiable Instruments: Negotiability and Transferability

________ is the original generic term for the documents used as payments to facilitate commercial transactions.

With a demand instrument, the ________ can demand actual payment at any time.

Which of the following is true regarding simple contracts as compared to negotiable instruments?

Vivian purchases a certificate of deposit for $10,000 at Right Now Bank. What does the certificate of deposit give Vivian?

If an instrument fails to qualify as a negotiable instrument, which of the following statements is true?

When an instrument fails to meet the technical requirements necessary to qualify as a negotiable instrument, which of the following statements is true?

Belinda asks Jordan to explain what an example of a negotiable instrument is for their upcoming test. Which of the following should Jordan tell Belinda are examples of negotiable instruments?

Analynd issues a note to Baliee indicating a specified date of payment in which to pay the note. This is an example of a(n) ________ instrument.

The term that stands for the time it takes a check to go through the traditional check-clearing process and be paid is known as ________.

Which of the following is a draft with respect to which the drawer and drawee are the same bank or branches of the same bank?

Documents used as payments to facilitate commercial transactions were labeled as negotiable instruments under ________.

A(n) ________ is a specific draft, drawn by the owner of a checking account, ordering the bank to pay the payee from that drawer's account?

A certificate of deposit is a note of ________.

Which of the following is true regarding the status of negotiable instruments in regard to international transactions?

A substitute for cash, or ________, is a written document containing the signature of the creator that makes an unconditional promise to pay.

Which is the correct term for a promise made by a bank to pay a payee a certain amount of money at a future time?

The ancient Lex mercatoria, or law of merchants, of England recognized that agreements could be paid for with documents that promised payment and that these documents themselves could then be circulated ________.

As a general rule under UCC 3-103(a) (9) , the promise or order to pay within a negotiable instrument must be ________ and not ________.

Which of the following are not associated with an instrument known as a traveler's check?

A negotiable instrument is a written document containing the signature of the creator that makes an unconditional promise or order to pay a sum certain of money ________.

As a general rule under UCC 3-103(a) (9) , the promise or order to pay within a negotiable instrument must be and not .