Indicate whether each of the following statements is true or false by writing T or F in the answer column.
1. The law presumes that commercial paper was issued for value. 1. __________
2. A subsequent holder of commercial paper can have no greater rights than the original holder. 2. __________
3. The words “pay to the order of” are required for an instrument to have negotiability.
3. __________
4. A stale check is one that is presented six months or more after it was written or issued.
4. __________
5. The main purpose of a certified check is to ensure that funds are on deposit to cover the check. 5. __________
6. A person who adds his or her name to a promissory note to strengthen it is known as a comaker. 6. __________
7. A bank can refuse to honor a depositor’s check even if it is properly drawn and there are sufficient funds on deposit. 7. __________
8. A postdated check is one that is written subsequent to the date appearing on the instrument. 8. __________
9. The Uniform Commercial Code provides that a reasonable length of time for demand for payment of a check is one year. 9. __________
10. If a depositor requests in a timely manner that his or her bank stop payment on a check written by the depositor, the bank must bear responsibility if the check is cashed.
10. __________