When a Holder in Due Course Transfers an Instrument,the Recipient

question 35

Multiple Choice

When a holder in due course transfers an instrument,the recipient acquires all the same rights even if he is not a holder in due course himself.This is the definition of:

• A)negotiability.
• B)the shelter rule.
• C)a claim in recoupment.
• D)a special indorsement.

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Definitions:

Spread

The difference between the purchase price and the sale price of a security, or the difference between the bid and ask prices.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for financing payroll, accounts payable, and other short-term liabilities.

Maturity

Maturity refers to the date on which the principal or final payment is due on a debt instrument, after which the debt is considered repaid.

Futures Position

A contractual obligation to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.