California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

Practice this question and more.

What is the main purpose of creating a negotiable instrument in financial transactions?

To increase interest rates
To decrease the loan amount
To allow a note to be transferred
To finalize the sale of a property

The correct answer is: To allow a note to be transferred

A, B, and D are incorrect because they do not accurately reflect the main purpose of creating a negotiable instrument. Creating a negotiable instrument is not intended to increase interest rates, decrease loan amount, or finalize a sale of property. The main purpose of creating a negotiable instrument is to allow a note or document to be transferred from one party to another in a financial transaction, providing a legally recognized proof of debt and promoting ease of exchange.