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1. Which of the following is true regarding Negotiable Instruments?
a. Price of negotiable instruments is not firmly established
b. Negotiable instruments can be transferred from one party to another with proper documentation
c. Both (a) and (b) are true
d. None is true
2. Which of the following is/are example(s) of negotiable instruments?
i. Certificate of Deposit (CD)
ii. Government Savings Bonds
iii. Promissory Notes
iv. Bills of exchange
v. Cheques
a. Only (i) and (ii)
b. All except (ii)
c. All except (i) and (ii)
d. Only (iii), (iv) and (v)
3. Which of the following negotiable instrument is an unconditional undertaking?
a. Promissory Notes
b. Bill of Exchange
c. Cheque
d. Both (b) and (c)
4. Which of the following negotiable instrument involves three parties?
a. Promissory Notes
b. Bill of Exchange
c. Cheque
d. Both (b) and (c)
5. In which type of negotiable instrument, drawee is always bank?
a. Promissory Notes
b. Bill of Exchange
c. Cheque
d. Both (b) and (c)
6. Which negotiable instrument(s) can be payable to both bearer and order of the instrument?
a. Promissory Notes
b. Bill of Exchange
c. Cheque
d. All of the above
7. Bill of Exchange is –
a. unconditional order to pay
b. unconditional undertaking/promise to pay
c. conditional order to pay
d. conditional undertaking/promise to pay
8. In case of cheques, who is the payee?
a. account holder, whose account will be debited for payment
b. banks, who will intermediate the payment transaction
c. account holder, whose account will be credited after payment, or person/institution, who will be credited on the bank counter after payment
d. none of the above
9. Cheque is a special type of –
a. Promissory Note
b. Bill of Exchange
c. Both (a) and (b)
d. None of the above
10. ‘Payable to order’ means –
a. whoever bears the instrument will be paid
b. only the person/institution, whose name is written in the instrument will be paid
c. issuer of the instrument will be paid
d. none of the above
ANSWER:-
1)c. Both (a) and (b) are true
2)b. All except (ii)
3)a. Promissory Notes
4)d. Both (b) and (c)
5)c. Cheque
6)d. All of the above
7)a. unconditional order to pay
8)c. account holder, whose account will be credited after payment, or person/institution, who will be credited on the bank counter after payment
9)b. Bill of Exchange
10)b. only the person/institution, whose name is written in the instrument will be paid
