1.What is necessary for consideration to be valid?

a) Consideration must be the product of a bargained for exchange.

b) Consideration must be part of an equal exchange.

c) Consideration must involve performance in exchange for a promise.

d) Consideration must involve a mutual exchange of promises

e) Consideration must be money

2. What is the term for giving a loan at an interest rate that exceeds the legal maximum?

a)No enforceable legal violation

b)Interest prohibition

c)Principle reduction

d)Usury

e)Plenary

3. How do courts generally treat clauses?

a)As invalid clauses

b)As clauses against public policy

c)As void under statute of frauds

d)As promises

e)As ineffective clauses

4. When the transfer of an instrument breaches a warranty associated with the instrument, which type of liability arises on the instrument?

a) Warranty liability

b) Payee liability

c) Signature liability

d) Primary liability

e) Secondary liability

5.Which of the following occurs when a former holder of an instrument has the instrument transferred back to him or her by negotiation or other means?

a) Cancellation

b) Renunciation

C)

d) Recourse

e) Release

6. If a customer's ATM card is lost or stolen, the customer must notify the bank within _____; if that is done, the customer is then liable for only the first _____ stolen.

a) 5 days; $50

b) 3 days; $100

c) 2 days; $50

d) 7 days; $100

e) 10 days; $500

7. ___________ time is the period between the time a check is written and the time it is presented for final payment, during which time a customer can still use his or her funds.

a) Transfer

b) Electronic

c) Chargeable

d) Float

8. Which of the following is a bank receiving a transferred check during a collection process excluding the first bank and the last bank?

a) Depositary

b) Acknowledging

c) Collecting

d) Intermediary

e) Transferring