Assume the time from acceptance to maturity on a $10,000,000 banker's acceptance is 90 days.Further assume that the importing bank's acceptance commission is 1 percent and that the market rate for 90-day B/As is 3.0 percent.The bond equivalent yield that the exporter pays in discounting the B/A is

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The bond equivalent yield is the annualized yield on a discounted instrument. It is calculated as follows:Bond equivalent yield = (Discount rate / (1 - Discount rate)) * (360 / Days to maturity)In this case, the discount rate is 3.0%, the days to maturity is 90, and the acceptance commission is 1%.Bond equivalent yield = (3.0% / (1 - 3.0%)) * (360 / 90) = 3.05%

Assume the Time from Acceptance to Maturity on a $10,000,000