Page 380 - F1 Integrated Workbook STUDENT 2018

Chapter 22

2.4 Negotiable instruments

Negotiable instruments are financial instruments that may be obtained as
investments. A key feature of negotiable instruments is that title passes when the
instrument is handed from one person to another. They are ‘bearer instruments’, and
ownership does not have to be recorded in a register of owners. This means that a
negotiable instrument can easily be sold by one person to another or one entity to
another.

Examples of negotiable instruments are:

The most important negotiable instruments as short-term investments are

Certificates of Deposit and Treasury bills, and possibly also bills of exchange
(particularly bank bills of high quality banks).

 bank notes

 bearer bonds

 Certificates of Deposit

 Bills of Exchange

 Treasury bills

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