Bankers acceptance, Financial Management

Bankers' acceptance is a debt instrument created to smoothen the commercial trade transactions. It is named so because a banker in this case accepts the ultimate responsibility for repayment of the loan to its holder. Like treasury bills and commercial papers, bankers' acceptances are also saleable at a discount.

Bankers' acceptances are considered very safe assets, as they allow traders to substitute the bank's credit standing for their own. They are used widely in international trade where the creditworthiness of a trader is unknown to the trading partner. Acceptances sell at a discount from face value of the payment order, just as US Treasury Bills are issued and trade at a discount from par value. Bankers acceptances trade at a spread over T-bills. The rates at which they trade are called bankers acceptance rates.

Posted Date: 9/8/2012 7:07:15 AM | Location : United States







Related Discussions:- Bankers acceptance, Assignment Help, Ask Question on Bankers acceptance, Get Answer, Expert's Help, Bankers acceptance Discussions

Write discussion on Bankers acceptance
Your posts are moderated
Related Questions
Question 1 Describe the Cost Volume Profit analysis. Explain its features, objectives and elements(CVP analysis) Question 2 Write in detail about the classification of

Functional Classification of Mutual Funds Functional classification of Mutual Funds is based on the basic characteristics of the mutual fund schemes for subscription. Mutual Fu

Question: (a) Describe the main elements of Working capital management? (b) Belle Rive Ltd Belle Rive Ltd has an annual turnover of Rs 60 million of which 80% is on cr

What is Share exchange    Predator company offers their shares in exchange for target company's shares. So target shareholders become part of predator shareholders and so have

1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit?

Q. Problems in assigning weights? Problems in assigning weights: for determining the weighted average costs of capital, weight has to assign to the specific cost of the individ

The Walter's model, thus relates the question of distributing the dividends and retaining the earnings to the investment opportunities that are available with the firm. (i) If a

The potato chip industry in the Northwest in 2007 was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competin

I want to see the solution that was provided in Feb 2013 for Calculate the new interest rate and excel function pv, Financial Accounting

stauffer , inc., has estimated sale and purchase requirments for the last half of coming year. parepare cash budget for the month of