Assume the Time from Acceptance to Maturity on a $1,000,000

question 70

Multiple Choice

Assume the time from acceptance to maturity on a $1,000,000 banker's acceptance is 180 days.Further assume that the importing bank's acceptance commission is 1.25 percent and that the market rate for 180-day B/As is 5.0 percent.Calculate the amount the exporter will receive if he discounts the B/A with the importer's bank.

• A)$906,250
• B)$909,375
• C)$968,750
• D)$993,750

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