Which of the Following Statements Is Not True

question 26

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 trade acceptance is discounted in the secondary market it becomes a market acceptance.
• C) Sight drafts require immediate payment.
• D) Trade acceptances arise when a bank guarantees payment on a commercial draft.

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Definitions:

Interest Rate

The cost of borrowing money or the return on invested funds, typically expressed as a percentage.

Present Value

The immediate worth of a future lump sum or successive cash inflows, considering a specific return rate.

Future Sum

The projected amount of money or value at a specific future date, usually factoring in variables such as interest rates and time periods.

Loan

A sum of money borrowed by one party from another, subject to repayment of the principal amount with interest.