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11. What is a negotiable instrument? Explain its different kinds.
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negotiable instrument is a signed document that promises a sum of payment to a specified person or the assignee. In other words, it is a formalized type of IOU: A transferable, signed document that promises to pay the bearer a sum of money at a future date or on-demand. The payee, who is the person receiving the payment, must be named or otherwise indicated on the instrument.
Because they are transferable and assignable, some negotiable instruments may trade on a secondary market.
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