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Negotiable Instruments
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Banker's Draft
A check-like instrument issued by a bank, ordering itself to pay a certain amount of money to a specified party.
Treasury Bond
A long-term government security with a maturity greater than ten years and offering periodic interest payments.
Money Order
A form of negotiable instrument which is prepaid for a specific sum of money; considered to be a safer form of payment than personal checks.
Negotiation
A process by which the ownership of a negotiable instrument is transferred to another party, who then has the right to pursue payment.
Bill of Exchange
An order from one party to another to pay a third party a fixed amount of money on a certain date or on demand.
Commercial Paper
An unsecured promissory note with a fixed maturity of usually 1 to 270 days; typically used by companies to meet short-term financial obligations.
Treasury Bill (T-Bill)
A short-term government security with a maturity of up to one year and sold at a discount from face value.
Promissory Note
A written promise to pay a certain sum of money at a specific future date or on demand to a specified person or the bearer.
Municipal Bond
A debt security issued by a state, municipality, or county to finance capital expenditures; usually exempt from federal taxes and sometimes from state and local taxes.
Bank Note
A type of negotiable instrument, which is a promissory note made by a bank and payable to bearer on demand.
Treasury Note
A medium-term government security with a fixed interest rate and maturity between one and ten years.
Repos
Short for 'Repurchase Agreements', these are short-term loans where securities are sold with an agreement to repurchase them at a higher price at a later date.
Foreign Bill of Exchange
A bill of exchange used in international trade where a fixed amount of money is to be paid in a foreign currency.
Check
A written order addressed to a bank to pay a specified sum of money from an individual's account to another individual or entity.
Certificate of Deposit (CD)
A financial document issued by a bank acknowledging a deposit of money for a specified period of time with a fixed or variable interest rate.
Bearer Bond
A fixed-income security that is owned by whoever is holding it, as opposed to having a registered owner.
Traveler's Check
A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.
Demand Draft
A negotiable instrument similar to a bill of exchange which is issued by a bank demanding payment from another bank or one of its own branches.
Fixed Deposit Receipt (FDR)
A financial instrument provided by banks which offers investors a higher rate of interest than a regular savings account until the given maturity date.
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