Which of the Following Terms Would Make an Instrument Nonnegotiable

question 31

Multiple Choice

Which of the following terms would make an instrument nonnegotiable?

• A) It specifies collateral as security for a debt.
• B) It is undated.
• C) It is payable in foreign money.
• D) It gives the holder the right to receive goods or money.

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Definitions:

Secured Creditors

Creditors who have a legal right to specific assets of a debtor as collateral for the debts owed to them.

Repossession Proceedings

The legal process by which a lender takes back property when the borrower defaults on payments.

Insolvent

A financial state in which an individual or organization cannot meet its debt obligations due to lack of funds.

Chapter 7 Bankruptcy

A form of bankruptcy that involves the liquidation of a debtor's non-exempt assets to pay off creditors and discharge debts.