Which of the Following Is a Requirement of Negotiability? ​

question 16

Multiple Choice

Which of the following is a requirement of negotiability? ​

• A)The payee and the drawee need not be designated.
• B)The instrument must be in writing and signed by the party executing it.
• C)The instrument must provide for the payment of a flexible amount of money.
• D)The order or the promise in the instrument must be conditional.

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Definitions:

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or real yield on an investment.

Inflation Premium

The additional interest rate that lenders demand to compensate for the loss of purchasing power of money due to inflation.

Yield Curve

The relationship between interest rates and the term of debt, generally expressed graphically. A normal yield curve is upsloping, reflecting rates that increase with increasing term. An inverted curve is downsloping.

Liquidity Premiums

Additional yield that investors require for holding securities with lower liquidity.