1: What is the term the Uniform Commercial Code (UCC) gives to a person who seeks to enforce a negotiable instrument that is lost, stolen, or destroyed?

a) holder in due course

b) holder

c) beneficiary

d) non-holder

2: What does it mean to have primary liability on a negotiable instrument?

a) Primary liability means that as soon as a party signs the instrument as a maker or accepts the instrument as a drawee, they become unconditionally liable for payment, and they are not allowed any defense.

b) Primary liability means that a holder in due course can collect from any party who signed the instrument.

c) Primary liability means that a maker or drawer is liable for payment only until the instrument is indorsed.

d) As soon as a party signs the instrument as a maker or accepts the instrument as a drawee, they are the first to become liable for payment

3: For a party to be subject to contractual liability on a negotiable instrument, what must occur?

a) An indorsement must contain the words without recourse.

b) A holder must present the instrument for payment.

c) The party must sign the instrument.

d) A drawee must require the proper identification of a payee.

4: A person who has transferred or presented a negotiable instrument has what type of liability on the instrument?

a)signature liability

b)warranty liability

c)primary liability

d) concurrent liability

5: A holder may cancel a negotiable instrument by taking which of the following actions? Choose 2 answers.

a) ripping up the instrument

b) writing paid on the face of the instrument

c) indorsing the instrument with the words accord and satisfaction

d) indorsing the instrument with the words without recourse