Jane Received a Check as Payment for Her Performance at a Night

question 16

Multiple Choice

Jane received a check as payment for her performance at a night club.In turn,she gives the check to Paul as a gift,but the check turns out to be worthless when he tries to cash it 45 days later.Does Paul have a claim against Jane?

• A)Yes, because he is the holder of the instrument.
• B)No, because warranties apply only if the instrument has been transferred for consideration.
• C)No, because he did not make a warranty claim within 30 days.
• D)Yes, because Jane should have made sure the check was valid before she gave it to Paul.

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Definitions:

Deferred annuity

A financial instrument that defers payments to the investor until a predetermined time.

Ordinary annuity

A series of equal payments made at the end of consecutive periods over a specified length of time.

Deferred annuity

An insurance product that provides future payments to the holder, typically starting at retirement, in exchange for current premiums or a lump sum payment.

Ordinary annuity

A regular annuity involves uniform payments disbursed at the end of each period within a set timeframe.