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.

Question

Quizplus · Accepted Answer

The certificate of deposit given by a bank or a savings and loan association when a deposit of money is made is a type of note, namely, a note of a bank. A certificate of deposit is an instrument containing (1) an acknowledgment by a bank that it has received a deposit of money and (2) a promise by the bank to repay the sum of money.

A Certificate of Deposit Is