The Negotiability of an Instrument Is Affected by a Statement

question 32

True/False

The negotiability of an instrument is affected by a statement of the transaction that gave rise to the instrument.

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Definitions:

Callable Bond

A type of bond that gives the issuer the right to repay the bond before the maturity date.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.

Convertible Bonds

Corporate bonds that have a provision that they may be converted to a designated number of shares or to a designated value of the corporation’s stock.

Face Value

The dollar amount written on a note; it is the same as the amount borrowed, or the principal. With regard to corporate and government bonds, the amount that will be paid to the holder when a bond is redeemed at maturity.