A Banker's Acceptance Is a Low-Risk Security Because at Least

question 305

True/False

A banker's acceptance is a low-risk security because at least two, and sometimes three, parties may be liable for its payment at maturity.

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Definitions:

Recover

The act of obtaining a return of something or compensation through legal processes, such as the recovery of damages in a lawsuit or the reclaiming of property.

Presentment Warranties

Guarantees made when presenting negotiable instruments, like checks, assuring the legitimacy and certain qualities of the instrument.

Instrument

A written legal document that officially records a legally enforceable act, process, or contractual obligation, arrangement, or right.

Promissory Note

A legal instrument in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.