Which of the Following Requirements Has to Be Met for a Holder

question 38

Multiple Choice

Which of the following requirements has to be met for a holder to qualify as an HDC under the shelter principle?

• A)The holder must not be in possession of a prior negotiable instrument.
• B)The holder must have notice of a defense or claim against the payment of the instrument.
• C)The holder must have been a party to a fraud or an illegality affecting the instrument.
• D)The holder must have acquired the instrument from an HDC.

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Definitions:

Money Supply

All monetary resources that are accessible in an economy at a particular timeframe, including but not limited to cash, coins, and the deposits in checking and savings accounts.

U.S. Government Securities

Financial instruments issued by the U.S. Department of the Treasury, including bonds, notes, and bills, used to fund federal government activities.

Excess Reserves

Funds held by banks over and above the legally mandated reserve requirement.

Required Reserves

The minimum amount of funds that a bank is required by regulation to hold in reserve against deposits made by customers.