Network Analytics Inc. (NAI) recently made a sale to a foreign trading partner, but the customer does not need to make a payment
for 30 days. NAI wants assurances that payment will be made in full before it makes shipment. Which type of short-term debt security should NAI and other firms in a similar situation use to remedy this situation
1 answer:
Answer:
The question is missing the options which can be found in the attached.
The correct option is banker's acceptance
Explanation:
Banker's acceptance is a guarantee by a bank to the exporting party to pay a sum of money at specific date.
In international business, exporters would require additional security against their receivable usually request for a banker's acceptance also known as bill of exchange.
The bank pays the exporter a discounted amount as agreed then chase the importer for the full value of the transaction.The difference between the discounted amount paid by the bank and the full value recoverable from the importer is the bank's margin.
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