Multiple choice

1) Secured transactions usually involve:

A. One, two, three, or four parties.

B. Two or three parties.

C. One or two parties.

D. One, two, or three parties.

E. Two, three, or four parties.

2) Under what doctrine could a party who is aware that an instrument is overdue take that instrument and acquire the rights of a holder in due course?

A. The taking for value doctrine.

B. The public policy exception.

C. The shelter principle.

D. The personal defense doctrine.

E. The endorsement protection doctrine

3) Alan guarantees Visa that he will pay for his daughter Florence’s debt with Visa. If Alan fails to pay Visa, who is liable for Florence’s debt?

A. Neither Alan nor Florence is liable to Visa.

B. Florence is primarily liable to Visa, as she was the party who used the credit in the first place.

C. Alan is primarily liable to Visa, the accommodation maker.

D. Both Alan and Florence are primarily liable to Visa for Florence’s debt.

4) Marti issues a check payable to the order of John, who indorses the check in blank and transfers the check to Amy, who transfers the check to Bill without indorsement. Bill wishes to cash the check. Which of the following best describes the liabilities of the parties?

A. At this point, no one is primarily liable on the check and the drawee bank is not primarily liable on the check until it accepts the check.

B. The drawee bank is not primarily liable on the check until it accepts the check.

C. The drawee bank is primarily liable on the check.

D. At this point, no one is primarily liable on the check.

E. Marti is primarily liable on the check.