For instrument to be negotiable-the maker must pledge

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Reference no: EM132264799

1. For an instrument to be negotiable, the maker must pledge:

A) A particular type of fund.

B) His or her general credit.

C) Interest payments.

D) Attorneys fees in the event of collection proceedings.

2. Which of the following is not a benefit of a PMSI?

A) A PMSI in consumer good is automatically perfected.

B) A PMSI creditor in consumer goods can keep the goods in strict foreclosure over the objections of the debtor.

C) A later creditor with in PMSI in inventory can get priority over an earlier creditor with a floating lien in the inventory if proper procedures are followed.

D) A later creditor with a PMSI in non-inventory can get priority over an earlier non-PMSI creditor in the same collateral if proper procedures are followed.

3. If a bank dishonors an instrument, it must give notice of dishonor ______.

A) Immediately.

B) Before its "midnight deadline."

C) Within 30 days.

D) Within one year.

4. Which of the following statements about sureties is true?

A) An accommodation party is a surety

B) Sureties have a right of contribution from co-sureties

C) A surety who must pay on an instrument has a right to reimbursement from the accommodated party.

D) All of the above statements are true.

5. A person who endorses a negotiable instrument is a __________________party to the instrument.

A) Primary

B) Secondary

C) Presentment

D) Performance

6. A payor bank which pays on a forged instrument has ______ rights when seeking to recover the payment than does the payor who pays on a forged drawer's signature.

A) Greater.

B) Lesser.

C) Identical.

D) Secondary.

Reference no: EM132264799

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