A bill of exchange differs from a promissory note in that:
A) only promissory notes have an active secondary market.
B) a promissory note is a short-term instrument, whereas a bill of exchange is not necessarily short-term.
C) there is generally an issuer and an acceptor for a bill of exchange, whereas there is no acceptor involved for a promissory note.
D) bills of exchange are only used for trade transactions.

Question

Quizplus · Accepted Answer

A bill of exchange involves both an issuer and an acceptor, while a promissory note does not require an acceptor. The other options are incorrect: A) Promissory notes do have an active secondary market, B) the differentiation of short-term vs not necessarily short-term is irrelevant to the distinction between a bill of exchange and a promissory note, and D) bills of exchange are not exclusively used for trade transactions.

A Bill of Exchange Differs from a Promissory Note in That