A time draft can become a negotiable money market instrument called

Question

Quizplus · Accepted Answer

A time draft that has been accepted by a bank becomes a banker's acceptance, which is a widely used negotiable money market instrument. A banker's acceptance is guaranteed by the bank that accepts the draft and can be traded on secondary markets. Eurodollars are deposits in a non-U.S. bank that are denominated in U.S. dollars, but they are not directly related to time drafts. Letters of credit and bills of lading are commercial documents used in international trade, but they are not directly related to negotiable money market instruments.

A Time Draft Can Become a Negotiable Money Market Instrument