Which of the following is true of bankers' acceptances?

Question

Quizplus · Accepted Answer

Bankers' acceptances are negotiable instruments that allow for financing of commercial transactions in the international market. They are similar to standby letters of credit in the domestic commercial paper market in that they provide credit enhancement to the borrower. There is a secondary market for bankers' acceptances where they can be bought and sold, and their default risk is generally considered low since they are backed by the creditworthiness of the bank that issued them. The International Monetary Fund does not guarantee either the principal or the interest of bankers' acceptances.

Which of the Following Is True of Bankers' Acceptances