Reference no: EM131399924

1. An instrument is dishonored when the party to whom the instrument is presented refuses to pay it.

True

False

2. A holder takes an instrument for value if he or she inherits an instrument.

True

False

3. An instrument payable to two or more persons in the alternative requires the indorsement of both payees for negotiation.

True

False

4. An indorsement should be identical to the name of the indorsee, regardless of how the name appears on the instrument.

True

False

5. A holder takes an instrument for value if he or she accepts the instru­ment in payment of a preexisting obligation.

True

False

6. There are no limitations on the shelter principle.

True

False

7. The shelter principle extends the benefits of HDC status and is designed to aid the HDC in readily disposing of the instrument.

True

False

8. A holder takes an instrument for value by promising to perform or give value in the future.

True

False

9. A blank indorsement can consist of a mere signature.

True

False

10. To avoid the risk of loss from theft, a holder may convert a blank indorsement to a special indorsement.

True

False

11. Often, whether a holder will be able to obtain payment on an instrument will depend on whether he or she is a holder in due course.

True

False

12. For a check, a “reasonable time” is ninety days after the date of the check.

True

False

13. A purchaser can become an HDC of an instrument even if it is so incomplete that an element of negotiability is lacking.

True

False

14. A transfer by assignment can make it possible for a transferee to receive more rights in the instrument than the prior possessor had.

True

False

15. A person who takes a negotiable instrument from a thief cannot become an HDC even if he or she acted honestly in the process of acquiring the instrument.

True

False

16. Usually, indorsements are qualified indorsements.

True

False