Which of the Following Statements Is Not True

question 7

Multiple Choice

Which of the following statements is not true?

• A)Commercial drafts represent a way to obtain a credit commitment from a customer
• Before the goods are delivered.
• B)When a banker's acceptance is discounted in the secondary market it becomes a
• Commercial note.
• C)Sight drafts require immediate payment.
• D)Banker's acceptances arise when a bank guarantees payment on a commercial draft.
• E)Both A and C.

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Definitions:

Yield To Maturity

The total return expected on a bond if held until its maturity date, including all remaining coupon payments and principal repayment.

Remaining Maturity

The amount of time left until a financial instrument, such as a bond, reaches its maturity date and the principal is due to be repaid.

Coupon Rate

The annual interest rate payable on a bond's face value by its issuer, representing the yield paid to bondholders.

Par Value

A nominal value assigned to a security by the issuer, often used in the context of bonds or stock.