A bank's promise to pay the holder a designated amount of money,on a designated future date,and often used in international trade is known as a(n):
A)promissory guarantee.
B)discount security.
C)bankers' acceptance.
D)in-the-money option.
E)accretion note.

Question

Quizplus · Accepted Answer

A bank's promise to pay the holder a designated amount of money on a designated future date is known as a bankers' acceptance. This instrument is often used in international trade transactions to provide assurance of payment to exporters, who may not trust the creditworthiness of the importer. The bankers' acceptance is a type of time draft, with the bank acting as an intermediary between the parties to the transaction.

A Bank's Promise to Pay the Holder a Designated Amount