Assume the Time from Acceptance to Maturity on a $5,000,000

question 87

Multiple Choice

Assume the time from acceptance to maturity on a $5,000,000 banker's acceptance is 90 days. Further assume that the importing bank's acceptance commission is 1.5 percent and that the market rate for 90-day B/As is 6.0 percent. Calculate the amount the exporter will receive if he discounts the B/A with the importer's bank.

• A)$4,981,750
• B)$4,906,250
• C)$4,009,375
• D)none of the above

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