Assume the Time from Acceptance to Maturity on a $10,000,000

question 44

Multiple Choice

Assume the time from acceptance to maturity on a $10,000,000 banker's acceptance is 90 days.Further assume that the importing bank's acceptance commission is 1 percent and that the market rate for 90-day B/As is 3.0 percent.Calculate the amount the exporter will receive if he holds it to maturity.

• A)$9,993,750
• B)$9,999,375
• C)$9,975,000
• D)$9,009,375

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Definitions:

Labor

The human effort, both physical and mental, that is used to produce goods and services.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual rate in the context of loans or savings.

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A state in which all factors of production and costs are variable, leading to no economic profit for firms in perfectly competitive markets.