Can the Payee of a Negotiable Instrument Be a Holder

question 50

Multiple Choice

Can the payee of a negotiable instrument be a holder in due course?

• A) Yes; the payee is always a holder in due course.
• B) Yes; for notes but not for drafts.
• C) No; not under any circumstances.
• D) Usually not,because the payee is usually aware of defenses or irregularities.

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Definitions:

Discount Period

The time frame in which a payment can be made at a discounted price, usually before a specified due date.

Inventory

The goods and materials that a business holds for the purpose of resale or use in production.

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the repayment period, interest rate, and other terms of payback.

Merchandise

Goods bought and sold by businesses, typically in the retail sector.