Banker’s Acceptance Backing – Finance MCQ with Answer

1 FINANCE MCQS

A banker’s acceptance, which is a time draft, is fully backed by ___________?

Commercial banks
Swiss banks
Agricultural banks
Functional banks

Correct Answer: A. Commercial banks

Detailed Explanation

A banker’s acceptance is a short-term credit instrument used in international trade. It is a time draft guaranteed by a commercial bank, meaning the bank promises to pay the holder the specified amount at maturity. This backing by a commercial bank makes banker’s acceptances low-risk and highly trusted in trade transactions.

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A banker’s acceptance, which is a time draft, is fully backed by ___________?

A banker’s acceptance, which is a time draft, is fully backed by ___________?

Detailed Explanation

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In cash flow analysis, two projects are compared using a common life approach, which is classified as…

In capital budgeting, the Internal Rate of Return (IRR) of a project is classified as its ____________?…

In evaluating independent projects, the results of Internal Rate of Return (IRR) and Net Present Value…