Negotiable Instruments

A negotiable instrument may be oral or written.

• True

• False

A written promise by one person to pay money to another person is called a(n)

• draft

• note

• certificate of deposit

• bill of lading

Certificates of deposit generally pay more _____ than regular savings accounts.

• fees

• interest

• options

• attention

The act of placing one's signature on an instrument, usually on the back, to transfer it to another:

• drawee

• endorsement

• negotiation

• schedule

A distinctive mark, characteristic, indicating identity:

• substitute

• signature

• assignment

• reconcile

Without conditions or limitations; absolute

• assignment

• reconcile

• unconditional

• substitute

Stop payment orders are good for six months, whether they be written or verbal.

• True

• False

To be negotiable, a promissory note or a certificate of deposit must contain a conditional promise to pay money.

• True

• False

The most common type of indorsement that automatically transfers order paper into bearer paper is a:

• qualified indorsement

• special indorsement

• restrictive indorsement

• blank indorsement

Indorsing the instrument with the words "For Deposit Only" is an example of this type of indorsement:

• qualified

• special

• blank

• restrictive