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

question 12

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 holds it to maturity.

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

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Definitions:

Debit Card

A payment card that deducts money directly from a consumer’s checking account to pay for purchases.

Checking Account

A type of bank account that allows for easy access to funds for daily transactions through checks, debit cards, or electronic means.

M1

A category of the money supply that includes all physical currency, demand deposits, traveler's checks, and other checkable deposits.

U.S. Treasury

The federal department responsible for managing government revenue, including producing currency, managing national accounts, and administering public finance.