Question

A banker's acceptance A. is a draft drawn on a bank and paid by that bank when presented to it. B. may be accepted by the bank for future payment. C. can be traded in a relatively liquid market until maturity. D. All of the options are true.

Answer 1

Answer: Option (D) is correct.

Explanation:

A banker's acceptance is an instrument that represents the promised payment by the bank in the future. This payment is accepted as a time draft by the bank and is to be drawn on a particular deposit. This draft is having all the information that is related to the future payment amount, date of the payment and the party to which the payment to be made. This acceptance can also be traded until the date of maturity.