A banker's acceptance is a time draft that is issued by a firm and guaranteed by a(n) ____.

Name: A banker's acceptance is a time draft that is issued by a firm and guaranteed by a(n) ____.
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Question

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A banker's acceptance is guaranteed by a bank, which means that the bank assumes responsibility for paying the face value of the draft on its maturity date. The issuing firm uses its bank's creditworthiness to enhance its own credit standing, making the instrument more attractive to investors.

A Banker's Acceptance Is a Time Draft That Is Issued