Question

Dart Multiple Choice-Circle the correct answer for each question. (2 points bints each) 1. A) An instrument that is an order by one party upon another party to pay a third party is promissory note. draft. bond. collateral note. To be negotiable, commercial paper must be signed by its maker. an unconditional promise to pay a sum certain. payable on demand or at a definite time. all of the above. Which of the following is not a type of commercial paper? certificate of deposit. bill of lading. draft. promissory note. A) Transferring non-negotiable commercial paper operates as a/n negotiation indorsement. accommodation. assignment. An indorsement must always be in ink. witnessed by at least two other people. either written on the instrument or an allonge. written twice wherever used. An indorsement containing the words "without recourse" is a/n blank. qualified. special. unqualified.

Answer 1

Question No.(1) -  An instrument that is an order by one party upon another party to pay a third party is a ?

Answer-- Option (B) - Draft, is Correct, because, a draft is a three-party instrument that is an unconditional written order by one party that orders a second party to pay money to a third party.

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Question No.(2) - To be negotiable, commercial paper must be ?

Answer-- Option (D) - All of the above, is Correct, because to be negotiable, an instrument must: (1) be in writing (2) signed by the maker or drawer (3) containing an unconditional promise to pay or order (4) a fixed amount of money (5) on demand or at a definite time (6) containing no additional unauthorized promises or undertakings (7) payable to order or bearer.

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Question No.(3) - Which of the following is not a type of commercial paper?

Answer-- Option (B) - Bill of lading, is Correct, because bill of lading is not a commercial paper.

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Question No.(4) - Transferring non-negotiable commercial paper operates as a/n ?

Answer-- Option (D) - Assignment, is Correct, because the transfer of a non-negotiable promise or order operates as an assignment.

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Question No.(5) - An indorsement must always be ?

Answer-- Option (C) - Either written on the instrument or an allonge, is Correct, as per Article 3 of the U.C.C.

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Question No.(6) - An indorsement containing the words "without recourse" is a/n ?

Answer-- Option (B) - Qualified, is Correct, because qualified indorsement consists of the words “without recourse''.