A Restrictive Indorsement

question 56

Multiple Choice

A restrictive indorsement:

• A) disclaims contract liability.
• B) removes warranty liability.
• C) attempts to restrict the rights of the indorsee in some fashion.
• D) always destroys negotiability.

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Definitions:

Default Risk

The risk that a borrower will not make the contractual interest or principal payments on their debt obligations.

Corporate Bond

A debt security issued by a corporation to raise funding, promising to repay the principal along with interest at specified dates.

TIPS Bond

Treasury Inflation-Protected Securities, a type of U.S. government bond designed to help investors protect against inflation by adjusting the principal value based on changes in the consumer price index.

Coupon Rate

The percentage of a bond's face value that is annually paid as interest by the bond.