Understanding Business and Personal Law
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Chapter 23: Negotiable Instruments
      
  1.A certificate of deposit is a note provided by a bank.  
  a.   TRUE  
  b.   FALSE  
      
  2.To be negotiable, an instrument  
  a.   can be for a fixed or flexible amount of money.  
  b.   must bear the signature of the drawee or acceptor.  
  c.   can be oral or written.  
  d.   must be payable on demand or at a definite time.  
      
  3.A time draft is payable as soon as it is presented to the drawee for payment.  
  a.   TRUE  
  b.   FALSE  
      
  4.When the date is omitted  
  a.   the date when the instrument is negotiated is considered to be the date of issue.  
  b.   the instrument must be returned and the date inserted.  
  c.   the date when the instrument is received is considered to be the date of issue.  
  d.   the instrument is not negotiable.  
      
  5.Negotiable instruments must be payable on demand or at a definite time.  
  a.   TRUE  
  b.   FALSE  
      
  6.Drafts involve three parties:  
  a.   the drawer, the maker, and the acceptor.  
  b.   the drawer, the drawee and the acceptor.  
  c.   the drawer, the maker, and the payee.  
  d.   the drawer, the drawee and the maker.  
      
  7.When two persons sign a note, they are known as co-payees.  
  a.   TRUE  
  b.   FALSE  
      
  8.In order for an instrument to be negotiable, it must be either typed or handwritten in pen.  
  a.   TRUE  
  b.   FALSE  
      
  9.A demand note is one which is  
  a.   payable when the payee demands payment.  
  b.   paid in one lump sum after one year.  
  c.   paid in a series of payments.  
  d.   payable at a future date which is written on the face of the note.  
      
  10.There are two basic kinds of negotiable instruments:  
  a.   drafts and bonds.  
  b.   drafts and checks.  
  c.   notes and CDs.  
  d.   notes and drafts.  

 
 
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