Final answer:
An instrument stating "Pay to the order of Karen Fuji or her assigns" is payable to order.
Step-by-step explanation:
If an instrument states, "Pay to the order of Karen Fuji or her assigns," it is payable to:
a. order
b. cash
c. bearer
d. holder
When an instrument states "Pay to the order of", it means that the payment must be made to a specified person or their authorized representative. In this case, the instrument states "Pay to the order of Karen Fuji or her assigns," which means that it is payable to Karen Fuji or anyone she designates as her assignee. This makes the correct answer option order.