Which of the following is TRUE about a promissory note?

A promissory note is a written document in which one party promises to pay a specified amount of money to another party under agreed-upon terms. The correct assertion is that it is a type of loan agreement. Promissory notes are frequently used in various lending situations, such as personal loans, mortgages, and business loans. They serve as evidence of debt and detail the repayment terms, including the interest rate, payment schedule, and consequences for default.

The other options do not accurately reflect the characteristics of a promissory note. For instance, a promissory note can be either secured or unsecured, and it is not limited to verbal agreements; it must be a written agreement to be legally binding and enforceable. Additionally, a promissory note is indeed legally enforceable, provided it meets the required legal elements, such as being signed by the borrower.