Which One of the Following Statements Is Correct About Banker's

question 92

Multiple Choice

Which one of the following statements is correct about banker's acceptances?

• A) They are equivalent to a sight draft.
• B) They represent the norm for installment sales.
• C) The bank guarantees payment of the invoice.
• D) The bank retains title to the merchandise.

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Definitions:

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, representing the benefits an individual, investor, or business misses out on when choosing one option over another.

Fiat Money

Currency that a government has declared to be legal tender, despite it lacking intrinsic value and not being backed by physical commodities.

Legal Tender

Government-issued currency that, by law, must be accepted as a form of payment within the country.

Hyperinflation

An extremely high and typically accelerating rate of inflation, leading to the rapid erosion of the real value of local currency.