Negotiable Instruments

A negotiable instrument is:

• a document guaranteeing the payment of a specific amount of money, either on demand or at a set time.

• a type of insurance policy.

• a legal term for a contract.

• a form of currency.

Three common types of negotiable instruments are:

• Promissory notes, bills of exchange, and checks

• Stocks, bonds, and mutual funds

• Credit cards, debit cards, and prepaid cards

• Mortgages, loans, and leases

True or False: A check is a type of negotiable instrument.

• True

• False

Fill in the blank: A _______ is a written promise to pay a specified amount of money to a certain individual or entity.

The nature of negotiable instruments is:

• A legal document guaranteeing the payment of a specific amount of money, either on demand or at a set time.

• A type of insurance policy.

• A form of currency used in international trade.

• A digital asset used in online transactions.

Explain discharge, defense, and liability in the context of negotiable instruments.

• Discharge refers to the release from obligation, defense involves legal reasons to avoid liability, and liability is the legal responsibility for the instrument.

• Discharge is the process of signing a negotiable instrument, defense is the act of defending a negotiable instrument in court, and liability is the amount of money involved.

• Discharge, defense, and liability are unrelated terms in the context of negotiable instruments.

• Discharge is the cancellation of a negotiable instrument, defense is the protection against forgery, and liability is the insurance on the instrument.

What are negotiable instruments?

• Promissory notes, bills of exchange, and checks

• Legal documents that cannot be transferred

• Non-transferable contracts

• Fixed assets like buildings and machinery

What does 'negotiable' mean in the context of negotiable instruments?

• Transferable and assignable to another party

• Fixed and unchangeable

• Non-transferable

• Only valid for a limited time

What does 'instrument' refer to in the context of negotiable instruments?

• A written document that promises or orders the payment of a specific amount of money

• A musical tool used in orchestras

• A device used for scientific measurements

• A tool used for gardening

What is one of the benefits of negotiable instruments?

• They are not important to the economy.

• They allow individuals to do business with certainty of receiving money.

• They require the actual transfer of cash.