3 Questions
Explain the difference between a bill of exchange and a promissory note.
A bill of exchange is a written order by one party to another to pay a certain sum of money to a third party on a specific date. A promissory note is a written promise by one party to pay a certain sum of money to another party at a specified future date or on demand.
What is the purpose of a bill of exchange?
The purpose of a bill of exchange is to facilitate trade and commerce by providing a secure method of payment and credit. It allows parties to transfer funds and settle transactions across international borders.
What are the key characteristics of a promissory note?
A promissory note is a unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer.
Test your knowledge of financial instruments with this quiz on bills of exchange and promissory notes. Learn about the differences between the two, their purposes, and key characteristics. Perfect for finance students and professionals.
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