Westonci.ca offers quick and accurate answers to your questions. Join our community and get the insights you need today. Find reliable answers to your questions from a wide community of knowledgeable experts on our user-friendly Q&A platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our 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
We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.
