Chapter 22

Acceleration clause

An __ clause allows the lender to demand full repayment of a loan if certain conditions are not met.

Article 3

__ 3 of the Uniform Commercial Code governs commercial paper.

Bearer

A __ is a person or entity in possession of a negotiable instrument.

Bearer instrument

A __ instrument is a type of negotiable instrument that is payable to whoever holds it.

Certificate of deposit

A __ of deposit (CD) is a financial product offered by banks that pays interest on a lump sum of money for a fixed period.

Check

A __ is a written order directing a bank to pay a specified sum from one account to another.

Collateral

__ refers to an asset pledged as security for a loan.

Collateral note

A __ note is a type of loan secured by collateral.

Conditional agreement

A __ agreement is one that depends on the occurrence of a certain event.

Demand draft

A __ draft is a type of check that is payable on demand.

Demand instrument

A __ instrument is one that is payable upon request.

Demand note

A __ note is a written promise to pay a specified amount on demand.

Draft

A __ is a written order from one party to another to pay a certain amount to a third party.

Drawee

The __ of a draft is the entity that is directed to pay the draft.

Drawer

The __ of a draft is the person or entity that creates the draft.

Extension clause

An __ clause allows for the extension of the loan term under certain conditions.

Extension of credit

____ refers to the amount of money a lender is willing to provide a borrower.

Fixed amount

A __ amount of money is a specific sum agreed upon in a contract.

Holder in due course

A __ in due course (HDC) is a holder of a negotiable instrument who has acquired it in good faith.

Installment note

An __ note is a type of loan that is paid back in installments.

Jumbo certificate of deposit

A __ certificate of deposit (jumbo CD) is a large denomination CD that typically offers higher interest rates.

Maker

The __ of a certificate of deposit is the financial institution that issues it.

Money

__ refers to the medium of exchange used to facilitate transactions.

Mortgage note

A __ note is a loan secured by real estate.

Negotiable instrument

A __ instrument is a written document that guarantees payment of a specific amount of money.

Negotiation

__ is the transfer of rights to a negotiable instrument from one party to another.

Nonnegotiable contract

A __ contract is one that cannot be transferred or assigned to another party.

Order instrument

An __ instrument is a type of negotiable instrument that is payable to a specific person.

Order to pay

An __ to pay is an instruction to make a payment.

Payable

An instrument is _______ at a definite time when it specifies a particular date for payment.

Payee

The ______ of a draft is the individual or entity who is to receive payment.

Permanency

The ________ requirement ensures that a negotiable instrument is valid over time.

Portability

The _________ requirement allows a negotiable instrument to be easily transferred.

Prepayment

A _______ clause allows the borrower to pay off a loan early without penalty.

Promise to pay

A _______ is a written agreement ensuring payment.

Promissory note

A _______ (or note) is a written promise to pay a specified amount of money on demand or at a definite time.

Record-keeping device

A _______ is a method for tracking financial transactions.

Representative's signature

A _______ indicates that someone is signing on behalf of another person or entity.

Revised Article 3 (Negotiable Instruments) of the Uniform Commercial Code

_______ governs the transferability and enforceability of negotiable instruments.

Sight draft

A _______ (or demand draft) is payable upon presentation to the drawee.

Signature

A _______ is any mark or symbol made with the intention to authenticate a document.

Signature requirement

The _______ ensures that a negotiable instrument is signed by the maker or drawer.

Small certificate of deposit

A _______ (or small CD) is a savings certificate with a fixed maturity date and interest rate.

Substitute for money

A _______ is something that can be used in place of currency for transactions.

Time draft

A _______ is payable at a specified future date.

Time instrument

A ______ is payable at a future date.

Time note

A _______ is a promissory note payable at a specified future date.

Trade acceptance

A _______ (or bill of exchange) is a draft used in commercial transactions, where the drawee is a buyer who agrees to pay the seller at a future date.

Unconditional

_______ means not subject to any conditions or contingencies.

Unconditional promise or order to pay requirement

The _______ means that the payment obligation must be clear and not dependent on any external factors.

Writing requirement

The _______ means that a negotiable instrument must be in written form.