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

question 53

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 holds it to maturity.

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

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Definitions:

Market Analysis

The study of the dynamics between potential customers and products to understand the needs and preferences of the target market, competition, and overall viability of a business strategy.

Due Diligence

The comprehensive appraisal of a business or investment opportunity to assess its commercial potential and risks.

Venture Capitalist Group

A collective or organization that invests large sums of money in startups and small enterprises with high growth potential in exchange for equity stakes.

Management Team

The group of high-level executives who direct the strategy, operations, and policies of a company.