Which of the following statements is correct?
A) A bank bill is a negotiable instrument.
B) A bank-accepted bill is regarded by market participants as equivalent to a bank-endorsed bill.
C) The issuer of the bank-accepted bill will repay the holder of the bill directly at maturity.
D) The issuer of a bank-endorsed bill has to pay regular interest payments to the holder, unlike with a bank-accepted bill.

Question

Quizplus · Accepted Answer

A bank bill is a type of negotiable instrument that functions as a promissory note or draft, allowing the holder to obtain payment from the issuer.

Answer: B 
 A bank-accepted bill is a type of negotiable instrument that has been accepted by a bank, indicating the bank's guarantee that the bill will be paid at maturity. This is typically viewed by market participants as equivalent to a bank-endorsed bill, which is a bill that has been stamped or signed by a bank indicating its endorsement.

Answer: C 
 The issuer of a bank-accepted bill is responsible for paying the holder directly at maturity, as the bank has already accepted the bill and guaranteed payment.

Answer: D 
 Neither a bank-endorsed bill nor a bank-accepted bill requires regular interest payments to the holder. The interest payment terms of a negotiable instrument are typically outlined in the bill itself, which could vary depending on the specific terms agreed to by the issuer and holder.

Which of the Following Statements Is Correct