________ arise from a short-term credit arrangement used by businesses to finance transactions involving firms in foreign countries or firms with unknown credit capacities.
A) Negotiable certificates of deposit
B) Eurodollar deposits
C) Banker's acceptances
D) Money market mutual funds

Question

Quizplus · Accepted Answer

Banker's acceptances are typically used in international trade finance as a form of short-term credit to finance transactions involving foreign firms or firms with unknown creditworthiness. They are essentially a promise by a bank to pay a specified amount at a future date, often used to facilitate the import/export of goods. Negotiable certificates of deposit and eurodollar deposits are also short-term credit instruments, but they are not specifically tied to international trade transactions. Money market mutual funds are investment vehicles that invest in a range of short-term, low-risk securities, but they are not a form of credit arrangement used by businesses to finance transactions.

________ Arise from a Short-Term Credit Arrangement Used by Businesses