Which one of the following is a three-party instrument?
A) a promissory note
B) a certificate of deposit
C) an ordinary lease
D) a draft

Question

Quizplus · Accepted Answer

A draft is a three-party instrument that involves the drawer, the drawee, and the payee. The drawer is the person who writes the draft and orders the drawee to pay the payee a specific sum of money. The drawee is the bank or financial institution that holds the funds and is ordered to pay the payee. The payee is the person or entity who receives the funds. Promissory notes, certificates of deposit, and ordinary leases are all two-party instruments that involve a borrower or issuer and a lender or lessor.

Which One of the Following Is a Three-Party Instrument