bryris wrote: My point with this is not to debate whether D is correct. But, the question could be construed to mean that the note is non negotiable since nothing was said to include elements of negotiability. The fact that he endorsed it, doesn't make it negotiable.

I think you are overanalyzing it. the problem was not directing at the negotiability of the note per se. If it had, it would have given more information about it. The issue really was on the endorsement and whether it was negotiated properly. In the exam, you choose the "best" answer given the circumstances.