Fertile Farm Corporation and Grain Commodities Inc. enter a contract for a sale of soybeans. Fertile draws a draft unconditionally ordering Grain to pay $75,000 to Fertile's order in ninety days. Grain signs and dates the draft. Before payment is due, Fertile needs cash. The drawer can
A)submit the draft to the drawee for immediate payment.
B)market the contracted-for soybeans to obtain a higher price.
C)accelerate the date for payment on the draft.
D)sell the draft in the commercial money market.

Question

Quizplus · Accepted Answer

Selling the draft in the commercial money market is a common practice for obtaining cash before the payment is due on a draft. This process involves selling the financial instrument (the draft) to a third party, often at a discount, to obtain immediate funds.