A(n) ________ is a clause in an instrument that allows the payee or holder to speed up 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 is a provision that allows the payee or holder of an instrument to demand payment of the principal amount of the instrument, plus accrued interest, immediately upon the occurrence of a certain event, such as a default in payment. This clause can be found in various types of financial instruments, including loans, promissory notes, and bonds.

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