A banker's acceptance is best described as:
Correct answer: D. A bank's guarantee of a time draft
- A. A shareholder's certificate of ownership
- B. A customer's ordinary savings account
- C. A government tax collection receipt
- D. A bank's guarantee of a time draft
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.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
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.
Practise Finance and Banking Basics
30 free Finance and Banking Basics MCQs from Introduction to Business, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Introduction to Business questions like this
Introduction to Business is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Finance and Banking Basics questions
In the accounting equation, total assets are equal to:
Compared with a bondholder, an ordinary shareholder generally has:
Which statement best describes a bank's liquidity?
If a bank's required reserve ratio increases, the immediate effect is generally to:
Which financial market mainly deals in short-term instruments with maturities of up to one year?
What is the main purpose of financial intermediation?