What type of negotiable instrument is payable to bearer?

Bearer paper is a type of negotiable instrument that is designed to be payable to whoever holds it, meaning it does not need to be endorsed or transferred by signature to another party. The defining characteristic of bearer paper is that it conveys ownership simply through possession; the holder of the document has the right to claim the payment without needing to identify themselves or their relationship to the payment.

In contrast, a promissory note and a check are typically payable to a specific person or entity named on the document. These instruments require the inclusion of the payee's name, and their transfer typically involves either endorsement or acceptance from the named party. A certificate of deposit, while also a negotiable instrument, is usually payable to a specific person or their order, rather than being freely transferable like bearer paper.

Thus, bearer paper is the correct answer as it uniquely embodies the characteristics of being payable by mere possession, differentiating it from other types of negotiable instruments.