Many firms borrow by using banker's acceptances (i.e., getting a bank to guarantee the firm's debt) when they are too small or too risky to use the commercial paper market.

Question

Quizplus · Accepted Answer

This statement is true. Banker's acceptances are commonly used by small or risky firms to obtain financing because the bank's guarantee helps to reduce the perceived risk. The commercial paper market is typically used by larger and more creditworthy firms.

Many Firms Borrow by Using Banker's Acceptances (I