An Exporter Has Just Received a Banker's Acceptance Created by an International

question 11

Multiple Choice

An exporter has just received a banker's acceptance created by an international transaction. If the banker's acceptance has a face value of $250,000 and the bank charges a commission of 1% per annum, how much will the exporter receive from the banker if the acceptance is held until maturity six months from today?

• A) $250,000
• B) $247,500
• C) $248,750
• D) $1,250

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Definitions:

Purely Competitive Seller

A seller in a market where there are many sellers and buyers, the product is standardized, and no single seller can influence the market price.

Shut Down

A temporary closure of a business or operation.

Marginal Cost

The expenditure required to produce one more unit of a product or service.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a particular price over a given period of time.