A banker's acceptance is best described as:
Correct answer: A. A bank's guarantee of a time draft
- A. A bank's guarantee of a time draft
- B. A customer's ordinary savings account
- C. A government tax collection receipt
- D. A shareholder's certificate of ownership
Explanation
A banker's acceptance is a time draft accepted by a bank, making the bank responsible for payment at maturity. It is commonly associated with trade finance rather than deposits, taxation, or ownership.
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About Finance and Banking Basics
Business finance covers capital requirements, sources of funds, budgeting, cash flow, investment decisions and basic financial statements and ratios. Banking includes commercial bank functions, deposits, loans, credit creation, interest and the role of a central bank, including its monetary policy and regulatory functions.
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