For Individuals and Firms Involved in the Import and Export

question 54

True/False

For individuals and firms involved in the import and export of goods and services, using the foreign exchange market is necessary, but incidental, to their underlying commercial or investment purpose.

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Definitions:

Accommodation Party

An individual who signs a loan or credit application on behalf of another, promising to pay if the primary borrower fails to do so.

Maker

A person who promises to pay a set sum to the holder of a promissory note or certificate of deposit.

Drawer

The party in a transaction that issues or writes a check or draft, instructing their bank to pay a specified sum to a certain beneficiary.

Notice Of Dishonor

A formal notification that a negotiable instrument, like a check, has been refused payment and is dishonored.