A negotiable instrument often used in trading goods that guarantees payment to the owner the instrument is known as (a):
A) bankers acceptance.
B) payment guarantee.
C) commercial paper.
D) bankers payment.
E) repurchase agreement.

Question

Quizplus · Accepted Answer

A bankers acceptance is a type of negotiable instrument that is often used by businesses in international trade to guarantee payment to the owner of the acceptance. It is essentially a promise made by a bank to pay a certain amount of money on a specific date, and is commonly used to facilitate the sale of goods between businesses in different countries. Commercial paper is also a type of negotiable instrument, but it is typically used to raise short-term funding rather than to guarantee payment for goods. Payment guarantee and bankers payment are not commonly used terms in the context of negotiable instruments, and a repurchase agreement is a different type of financial agreement altogether.

A Negotiable Instrument Often Used in Trading Goods That Guarantees