A Certificate of Deposit Is

question 5

Multiple Choice

A certificate of deposit is:

• A) an instrument in which the maker makes an unconditional promise to pay a fixed amount of money with interest to the payee on demand.
• B) the most widely used form of commercial paper that is a draft payable on demand and drawn on a bank.
• C) an instrument in which the maker makes an unconditional promise to pay a fixed amount of money without interest to the payee at the specified future time.
• D) an instrument containing an acknowledgment by a bank that it has received a deposit of money and a promise to repay the sum of money.

---

Definitions:

Due Diligence

The investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or a financial transaction with another party.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Confession of Judgment

A legal agreement in which a debtor permits a creditor to obtain a judgment against them without a trial.

Undertaking

A formal pledge or promise, often in a legal context, indicating an agreement to perform a particular action or task.