Sergio Makes a Gift of a Check to Todd Who

question 27

Multiple Choice

Sergio makes a gift of a check to Todd who takes it in good faith and without notice of any claim, defense, or defect. With respect to this check, Todd is​

• A) ​none of the choices.
• B) ​an assignee.
• C) ​an ordinary holder.
• D) ​an ordinary holder in due course.

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Definitions:

Working Capital

Working capital is the difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency of the business.

Debt Covenants

Agreements or conditions included in debt contracts that the borrower must adhere to, designed to protect the lender by restricting the borrower’s activities and enhancing the likelihood of debt repayment.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the securities industry.

Debt Securities

Financial instruments representing money borrowed by an issuer to be repaid with interest, such as bonds, notes, and bills.