Reference no: EM131749114

1.Samantha writes a check to Miranda for $2,500, to be drawn from her account with Mahopani Bank. Miranda deposits the check into her account with Central Bank. Central Bank send the check to Buffalo Bank, which sends the check to Mahopani Bank for payment. Which of the following statements regarding this set of facts is true?
A) Central Bank is the payor bank.
B) Mahopani Bank is an intermediary and collecting bank.
C) Buffalo Bank is the depository bank.
D) Buffalo Bank is an intermediary and collecting bank.

2.Carl writes a check to Fred for $500 dated January 2. Fred forgets the deposit the check until August. When the check arrives at Carl's bank for presentment, Carl's bank
A) may honor the check.
B) must honor the check.
C) must not honor the check.
D) may honor the check if its acting in good faith.

3.Jayla and Jamal enter an agreement in which Jamal agrees to pay Jayla $500 over the next three months for new stereo. Jamal calls Jayla on the phone and promises to pay her the entire $500 no later than 90 days from that date. This agreement fails to constitute a negotiable instrument, because negotiable instruments must
A) state an unconditional promise or order to pay.
B) be in writing.
C) state a fixed amount of money.
D) be payable on demand or at a definite time.

4.Carl writes a check for $500 to Fred. Fred endorses it over to Sally in exchange for a television set. Sally deposits the check, only to discover that Carl stopped payment on the check. Which of the following statements is true?
A) No one is obligated to pay anything to Sally.
B) Fred must pay $500 to Sally
C) Carl must pay $500 to Sally
D) The bank must pay $500 to Sally

5.Carl writes a $500 check payable to Bob and Bob endorses the check in blank and gives it to Sally. Sally is now a/an
A) maker
B) endorser
C) drawee
D) bearer