Question 1

Describe the unconditionality feature of a bill or note.

Accepted Answer

The promise or order to pay made in a bi...

Question 2

What are the consequences of not obtaining a letter of credit?

Accepted Answer

When a buyer and seller enter into a con...

Question 3

A bill of exchange that is payable at a definite future time is known as a sight bill.

Accepted Answer

A) True 
 B)False

Question 4

Any reference to some other agreements in a note would make it non-negotiable.

Accepted Answer

A) True 
 B)False

Question 5

In a promissory note, the party who promises to pay is called the payee.

Accepted Answer

A) True 
 B)False

Question 6

Barter is an example of a countertrade.

Accepted Answer

A) True 
 B)False

Question 7

The transfer of all or some of the rights under a contract is called a(n)  ________.

Accepted Answer

A)   assignment
B)   allonge
C)   endorsement
D)   restrictive endorsementE) All of the above
F) None of the above

Question 8

A drawee of a bill who, by signing the bill on its face, agrees to pay the bill when it is due is referred to as a(n)  ________.

Accepted Answer

A)   accommodation party
B)   acceptor
C)   holder in due course
D)   holderE) B) and D)
F) B) and C)

Question 9

In a draft transaction, if the drawee is a bank, then the draft is referred to as a ________.

Accepted Answer

A)   promissory note
B)   check
C)   trade acceptance
D)   certificate of depositE) All of the above
F) None of the above

Question 10

A bill involved in a draft transaction is considered a note ________.

Accepted Answer

A)   if the drawer owes money to the drawee
B)   if the drawee is drawer's buyer
C)   if the drawee is a borrower of the drawer
D)   if the drawer has kept money with the drawee for safeguardingE) B) and C)
F) All of the above

Question 11

A bill of exchange is an unconditional written order.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a similarity between a qualified endorsement and an endorsement prohibiting further endorsement under the ULB?

Accepted Answer

A)   In both the endorsements, the endorsee has no rights against the endorser.
B)   In both the endorsements, the endorsee is considered a holder of the instrument.
C)   In both the endorsements, the endorsee is considered a collecting agent for the endorser.
D)   In both the endorsements, the endorsee has no rights against endorser until a stipulated condition is met.E) B) and C)
F) A) and B)

Question 13

To be negotiable, a bill or note must contain a promise by the drawer to make payment.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following financial institutions of the World Bank provides funds to private companies?

Accepted Answer

A)   the International Development Association
B)   the International Bank for Reconstruction and Development
C)   the International Finance Corporation
D)   the International Centre for Settlement of Investment DisputesE) A) and B)
F) A) and D)

Question 15

Describe the two major rules that limit a maker's excuse not to pay for forged instruments.

Accepted Answer

There are two major exceptions to the ge...

Question 16

A ________ is an instrument issued by a bank or another person at the request of an account party that obliges the issuer to pay to a beneficiary a sum of money within a certain period of time upon the beneficiary's presentation of documents specified by the account party.

Accepted Answer

A)   bill of lading
B)   cashier's check
C)   certificate of deposit
D)   letter of creditE) A) and B)
F) B) and D)

Question 17

A promissory note differs from a bill of exchange in that a promissory note ________.

Accepted Answer

A)   cannot have a fixed date for payment
B)   is not a written order to pay
C)   is a two-party instrument
D)   is always paid on demandE) None of the above
F) A) and B)

Question 18

According to common law, which of the following is true of payment in a negotiable instrument?

Accepted Answer

A)   It has to be paid in the currency of the country in which it was issued.
B)   It cannot be made in installments.
C)   It should be ascertainable from the instrument itself.
D)   It can be paid in a nonmonetary mode of payment.E) A) and C)
F) None of the above

Question 19

Which of the following definitions describes a drawee to a bill of exchange?

Accepted Answer

A)   the issuer of a bill of exchange
B)   a person who signs a bill of exchange or note to lend his or her credit to another party
C)   the person ordered to pay a bill of exchange
D)   a person who receives an endorsed bill of exchange or note from an endorserE) A) and B)
F) A) and C)

Question 20

In a trade acceptance, the drawer is ordered to pay a specified sum of money to the drawee.

Accepted Answer

A) True 
 B)False

Exam 12: Financing

Which of the following definitions describes a drawee to a bill of exchange?

Correct AnswerverifiedShow Answer

Describe the two major rules that limit a maker's excuse not to pay for forged instruments.

Correct AnswerverifiedThere are two major exceptions to the ge...View AnswerShow Answer

A drawee of a bill who, by signing the bill on its face, agrees to pay the bill when it is due is referred to as a(n) ________.

Correct AnswerverifiedShow Answer

A bill involved in a draft transaction is considered a note ________.

Correct AnswerverifiedShow Answer

A bill of exchange that is payable at a definite future time is known as a sight bill.

Correct AnswerverifiedShow Answer

In a promissory note, the party who promises to pay is called the payee.

Correct AnswerverifiedShow Answer

Describe the unconditionality feature of a bill or note.

Correct AnswerverifiedThe promise or order to pay made in a bi...View AnswerShow Answer

A ________ is an instrument issued by a bank or another person at the request of an account party that obliges the issuer to pay to a beneficiary a sum of money within a certain period of time upon the beneficiary's presentation of documents specified by the account party.

Correct AnswerverifiedShow Answer

In a draft transaction, if the drawee is a bank, then the draft is referred to as a ________.

Correct AnswerverifiedShow Answer

What are the consequences of not obtaining a letter of credit?

Correct AnswerverifiedWhen a buyer and seller enter into a con...View AnswerShow Answer

To be negotiable, a bill or note must contain a promise by the drawer to make payment.

Correct AnswerverifiedShow Answer

Any reference to some other agreements in a note would make it non-negotiable.

Correct AnswerverifiedShow Answer

A promissory note differs from a bill of exchange in that a promissory note ________.

Correct AnswerverifiedShow Answer

The transfer of all or some of the rights under a contract is called a(n) ________.

Correct AnswerverifiedShow Answer

According to common law, which of the following is true of payment in a negotiable instrument?

Correct AnswerverifiedShow Answer

Which of the following financial institutions of the World Bank provides funds to private companies?

Correct AnswerverifiedShow Answer

In a trade acceptance, the drawer is ordered to pay a specified sum of money to the drawee.

Correct AnswerverifiedShow Answer

Which of the following is a similarity between a qualified endorsement and an endorsement prohibiting further endorsement under the ULB?

Correct AnswerverifiedShow Answer

A bill of exchange is an unconditional written order.

Correct AnswerverifiedShow Answer

Barter is an example of a countertrade.

Correct AnswerverifiedShow Answer

Correct Answer
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There are two major exceptions to the ge...
View Answer

Correct Answer
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The promise or order to pay made in a bi...
View Answer

Correct Answer
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When a buyer and seller enter into a con...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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