What is a banker's acceptance? How are they initiated? Why are they desirable for the exporter?
What will be an ideal response?
Answer: A draft, or bill of exchange, is a written order from the exporter telling the importer when and how much to pay. When properly contracted, a draft can become a negotiable instrument and trade in the secondary market. If the draft provides a specific payment date and is presented to the importer's bank, it becomes a banker's acceptance (BA) and the bank makes an unconditional promise to make payment upon maturity. A BA may sell in the secondary market like any other marketable security and the holder need not wait until maturity to liquidate. Thus, BAs facilitate trade by reducing risk and potentially speeding cash flows to the exporter.
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What type of control is: Company checks are prenumbered.
What will be an ideal response?
A prospective buyer of real estate gives a broker a cash deposit with an offer to purchase as evidence of their intention to complete the transaction. This deposit is known as:
A. Down payment and the amount must be at least 10% of the sales price. B. Down payment and refunded when the contract is agreed upon bu both parties. C. Earnest money and the amount is negotiated between the parties. D. Earnest money and is essential to make purchase agreement binding.