Asked by Kaohulani Palakiko on Apr 29, 2024
Verified
A bank has given value for a negotiable instrument to the extent that the bank has a security interest in the instrument.
Negotiable Instrument
A legal document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.
Security Interest
A legal claim or lien on collateral (property or assets) granted to secure the performance of an obligation, usually repayment of a debt.
Bank
A financial institution licensed to receive deposits, offer loans, and provide other financial services to individuals and businesses.
- Understand the rights and obligations of a Holder in Due Course (HDC) and the protections afforded to them.
Verified Answer
HK
Hunter KariusMay 03, 2024
Final Answer :
True
Explanation :
A bank that has given value for a negotiable instrument indeed has a security interest in that instrument, as giving value is one of the conditions under the Uniform Commercial Code (UCC) for a party to be considered a holder in due course, which includes having a security interest in the instrument.
Learning Objectives
- Understand the rights and obligations of a Holder in Due Course (HDC) and the protections afforded to them.