Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Join our platform to get reliable answers to your questions from a knowledgeable community of experts. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.
Sagot :
A time draft payable to a seller of goods with payment guaranteed by a bank is a banker's acceptance.
A banker's acceptance is a short-term investment plan that is created by a company or firm with a guarantee from a bank. It is important that the company or firm is a non-financial firm. It is a guarantee that the bank gives that a buyer will pay the seller the amount at a future date. A good rating is a prerequisite for obtaining the banker's acceptance.
This is very useful, especially during foreign trade. During foreign trade, the creditworthiness of the importer is not known. The period of the banker's acceptance is usually lesser than 180 days. These acceptances are traded at discounts from the face value in the secondary markets. So, the banker's acceptance acts as a negotiable time draft.
This guarantee from the bank is a written promise by the bank to the seller to pay the sum specified if the buyer is not able to do so. This promise is backed by the bank so the seller feels confident in exporting his goods. As it is safe and liquid, the return on the banker's acceptance is low.
Learn more about banker's acceptance here:
https://brainly.com/question/13190092
#SPJ4
Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.
