Jen Is the Maker of a Note, on Which Bart

question 41

Multiple Choice

Jen is the maker of a note, on which Bart is secondarily liable. Credit Instruments Company (CIC) is the current holder of the note. Bart will be obligated to pay the note if​

• A) ​Jen defaults on the note.
• B) ​CIC breaches a transfer warranty.
• C) ​CIC negotiates the note to Delta Collection Agency, a third party.
• D) ​CIC presents the note for payment.

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Definitions:

Contractual Obligation

A duty or commitment that is legally enforceable due to a contract agreement.

Hedging

A financial strategy used to reduce or manage risk associated with price movements of assets by taking an opposite position in a related security.

Hedging Relationship

A risk management strategy where two or more financial instruments are used together to offset potential losses in investments.

Hedged Item

A recognized asset or liability, unrecognized firm commitment, or highly probable forecast transaction in a hedging relationship.