A(n)________ is a clause in an instrument that allows the payee or holder to quicken payment of the principal amount of the instrument, plus accrued interest, upon the occurrence of an event.
A)acceleration clause
B)prepayment clause
C)extension clause
D)forestallment clause

Question

Quizplus · Accepted Answer

An acceleration clause allows the payee or holder of an instrument to demand immediate payment of the principal amount plus accrued interest if a certain event occurs. This clause is often found in loan agreements and allows the lender to protect their investment in case the borrower defaults or fails to make payments.

A(n)________ Is a Clause in an Instrument That Allows the Payee