Which of the Following Statements About Bank Bills Is Incorrect

question 55

Multiple Choice

Which of the following statements about bank bills is incorrect?

• A) The drawer is the party that issues the bill.
• B) The acceptor is the party that has primary liability to repay the face value of the bill.
• C) The payee is the party that receives the borrowed funds when the bill is initially issued.
• D) The discounter is the party that repays the acceptor at maturity.

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Definitions:

Annual Coupon

The yearly interest paid to bondholders, typically expressed as a percentage of the bond's face value.

Market Yield

The annual income returned on an investment divided by its current market price.

Interest Rate Risk

The potential for loss due to a change in interest rates affecting investment values or borrowing costs.

Time To Maturity

The remaining life of a debt instrument, at the end of which the principal is usually repaid.