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Questions and Answers
What does it mean when a negotiable instrument is payable to 'bearer'?
What does it mean when a negotiable instrument is payable to 'bearer'?
- It can only be cashed by the original issuer
- It can only be collected by the bank
- It can be paid to anyone who holds it (correct)
- It can only be endorsed by an attorney
What is a key characteristic of negotiable instruments?
What is a key characteristic of negotiable instruments?
- Must be in writing (correct)
- Must be orally agreed upon
- Can only be transferred by delivery
- Must contain a conditional promise to pay
Why are negotiable instruments widely accepted in commercial transactions?
Why are negotiable instruments widely accepted in commercial transactions?
- Because they require oral agreements
- Due to their fixed payment amounts
- Because they can be transferred easily by delivery (correct)
- Due to being non-transferable
Who becomes the holder in due course when a negotiable instrument is transferred?
Who becomes the holder in due course when a negotiable instrument is transferred?
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Which type of document guarantees the transfer of a specific amount of money?
Which type of document guarantees the transfer of a specific amount of money?
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What type of promise must a negotiable instrument contain?
What type of promise must a negotiable instrument contain?
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