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| 1 | |
Akina is the holder of an instrument if it has been _____. |
| | A) | issued to her |
| | B) | indorsed to her |
| | C) | issued or indorsed to her |
| | D) | issued, indorsed, or stolen by her |
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| 2 | |
A typed instrument has numerous changes made in ink. Cisco would take the instrument _____. |
| | A) | with notice of the defense of alteration |
| | B) | without notice of the defense of alteration |
| | C) | with notice of the defense of alteration only if he actually knew that he instrument were improperly altered |
| | D) | without notice of the defense of alteration if he refused to inspect the instruments |
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| 3 | |
An instrument is postdated when Claud receives it. Claud _____. |
| | A) | cannot be a holder in due course |
| | B) | may be a holder in due course |
| | C) | could receive the rights of a holder in due course but never become a holder in due course |
| | D) | cannot be a holder in due course since the instrument is not negotiable. |
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| 4 | |
Titan Industry had repair work done on a chiller unit and gave ACME Repairs a promissory note. ACME negotiated the note to Friendly Finance Co. Titan may not assert the lack of satisfactory completion of the repair work against _____. |
| | A) | ACME |
| | B) | Friendly Finance if Friendly is connected with ACME |
| | C) | Friendly Finance if Friendly is a holder in due course |
| | D) | Either ACME or Friendly |
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| 5 | |
Korey gave a promissory note to Linda in exchange for furniture that Linda asserted were valuable antiques. If the furniture were worthless, what defense to payment does Korey have? |
| | A) | Fraud in the essential nature of the transaction |
| | B) | Fraud in interstate commerce |
| | C) | Fraud in the incentives |
| | D) | Fraud in the inducement |
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| 6 | |
Lila paid a promissory note but did not reclaim and destroy the note. What risk did Lila take? |
| | A) | She may have paid the wrong person. |
| | B) | She may have paid too much. |
| | C) | She may have to pay the note again. |
| | D) | She takes no risk if she obtained a receipt from the individual that she paid. |
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| 7 | |
Sierra, age 15, gave a promissory note to Superior Health Services for medical treatment while her parents were out of town. May Sierra lawfully refuse to pay the note? |
| | A) | Not if the treatment was necessary. |
| | B) | Not if Superior charged her only what was reasonable for necessary treatment. |
| | C) | Yes, since Sierra was a minor. |
| | D) | Yes, since Sierra should have an adult guardian named. |
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| 8 | |
Before Madison filed for bankruptcy while owing a note. Charles, the note holder, gave the note to his friend, Andrew. May Madison assert bankruptcy as a defense? |
| | A) | Yes. |
| | B) | No. |
| | C) | Only against Charles, but not Andrew. |
| | D) | Only against Andrew but not Charles. |
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| 9 | |
Presentment may be made _____. |
| | A) | orally |
| | B) | in writing |
| | C) | electronically |
| | D) | by any commercially reasonable means |
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| 10 | |
If a storm isolates Big Bank for three days, is Big Bank still bound by the notice of dishonor rules? |
| | A) | Yes, in all circumstances. |
| | B) | No in all circumstances. |
| | C) | Yes, since Big Bank should have foreseen the storm. |
| | D) | No, since the storm was due to circumstances beyond their control. |
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