Why is a promissory note considered negotiable?

A promissory note is considered negotiable because it provides a mechanism for the holder to transfer the right to receive payments to another party. This characteristic of negotiability is key in financial and legal contexts, as it allows for the buying and selling of the note in the market, thereby increasing its liquidity and utility in transactions.

Negotiability means that the promise or order to pay can pass from one holder to another without the need for additional formalities or the consent of the issuer, as long as certain legal requirements are met. The ability to transfer the right to receive payments makes the promissory note a valuable financial instrument in lending, investment, and trade.

In contrast, the other statements do not correctly reflect the principles of negotiability. A promissory note can indeed be sold, it does not have to be notarized for transfer, and it typically includes specific repayment terms, which are essential for defining the obligations of the borrower.