Question : ______________ is a payment instrument issued by a bank similar to a cheque
Option 1: Cheque
Option 2: Demand draft
Option 3: Bill of exchange
Option 4: Promissory note
Answer (1)
9th Jan, 2024
Correct Answer: Demand draft
Solution : The correct answer is b) Demand draft
A demand draft is a payment instrument issued by a bank, similar to a cheque. It is a prepaid instrument where the bank guarantees the payment. The bank issuing the demand draft is the drawer, the person or entity to whom the demand draft is made payable is the payee, and the individual or entity who receives the demand draft is the beneficiary.
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