A two-party negotiable instrument that is a special form of note created when a person deposits money at a financial institution in exchange for the institution's promise to pay back the amount of the deposit plus an agreed-upon rate of interest upon the expiration of a set time period agreed upon by the parties is known as a ________.
A)collateral note
B)check
C)certificate of deposit
D)bill of exchange

Question

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The description matches a certificate of deposit (CD), which is a two-party negotiable instrument in which the depositor gives money to the financial institution and receives a promise to pay the deposit back with interest after an agreed-upon period. A collateral note refers to a note secured by collateral, a check is an order to pay from one person to another, and a bill of exchange is a negotiable instrument used in international trade.

A Two-Party Negotiable Instrument That Is a Special Form of Note