The Holder of a Promissory Note Fails to Present the Note

question 36

Multiple Choice

The holder of a promissory note fails to present the note to the maker for payment on the date on which it is due. What effect does this have on the liability for payment?

• A) It requires court action in order to make the holder liable for payment.
• B) It requires court action in order to hold previous indorsers liable for payment.
• C) It releases the maker from liability for payment.
• D) It releases indorsers from liability for payment.

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Definitions:

Return On Assets

A profitability ratio that indicates how efficiently a company uses its assets to produce profit, calculated by dividing net income by total assets.

Net Profit Margin

A financial performance metric that shows the percentage of sales that has turned into profits, calculated by dividing net profit by revenue.

Price/Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate a company's financial health and growth prospects.