Considering Only the Issue of Terminology, Not the Issue of Handwriting

question 42

Multiple Choice

Considering only the issue of terminology, not the issue of handwriting or whether Sophie properly performed, which of the following is true regarding whether the language "I, Reza Salehi, owe Sophie Smith $50" is insufficient to establish elements required for a negotiable instrument?

• A) The language is sufficient because it acknowledges the debt, and that is the only required standard.
• B) The language is insufficient because it only acknowledges the debt and is not a promise to pay.
• C) The language is sufficient only because the instrument is in an amount under $500.
• D) The language is sufficient because it acknowledges the debt and is also a promise to pay.
• E) The language is sufficient because it acknowledges the debt and is unconditional.

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Definitions:

Ordinary Annuity

Homogeneous financial installments disbursed at the cessation of individual periods across a confirmed timeline.

Nominal Interest

The interest rate stated on a loan or investment agreement before any adjustments for compounding or inflation.

Effective Rate

Another term for the effective interest rate, emphasizing its real cost or yield accounting for compounding and other factors.

Compounding Interval

The frequency at which interest is added to the principal of a deposit or loan, affecting the total interest earned or paid.