The Use of Bankers' Acceptances Is Most Useful in Reducing

question 5

Multiple Choice

The use of bankers' acceptances is most useful in reducing

• A)interest rate risk.
• B)credit risk.
• C)exchange rate risk.
• D)the gap between current exchange rates and future exchange rates.

---

Definitions:

Assumes a Risk

A legal doctrine where an individual knowingly exposes themselves to a hazard or danger and is considered to have consented to the risk involved.

Insurer

A company or entity that provides insurance policies to protect individuals or organizations against financial loss or damage.

Premium

A sum paid periodically to the insurer by the insured for covering their risk.

Potential Loss

A hypothetical amount of money that a business or individual could lose in the future due to risks.