Carlton executed and delivered to Raymond a $1,000 negotiable note payable to Raymond or bearer. Raymond then negotiated it to Fred and endorsed it on the back by merely signing his name. Which of the following is a true statement?
a. The instrument is bearer paper, and Fred can convert it to order paper by writing "pay to the order of Fred" above Raymond's signature.
b. Raymond's endorsement was a special endorsement.
c. The instrument was initially bearer paper and cannot be converted to order paper.
d. Raymond's endorsement was necessary to Fred's qualification as a holder.