What Development in the 1990's Diminished the Importance of Banker's

question 24

Multiple Choice

What development in the 1990's diminished the importance of banker's acceptances?

• A)Export-credit insurance became available and minimized the need for letters of credit.
• B)Import-export banks began to refuse to accept the default risk imposed on them by letters of credit.
• C)Improved wire-transfers of funds eliminated most of the need for letters of credit.
• D)International credit markets replaced letters of credit with derivatives that assumed the risk addressed by letters of credit.

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Definitions:

FASB

The Financial Accounting Standards Board, an organization that establishes financial accounting and reporting standards in the United States.

AICPA

The American Institute of Certified Public Accountants, a professional organization for Certified Public Accountants (CPAs) in the United States.

Shares Of Stock

Shares of stock represent units of ownership interest in a corporation, giving shareholders a portion of the company's profits and assets.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and it has its own rights and liabilities distinct from those of its owners.