Bankers acceptance, Financial Management

Assignment Help:

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.


Related Discussions:- Bankers acceptance

Computing the expected total return for investment, To compute the total ...

To compute the total returns we need the investment horizon, reinvestment rate and the price of the bond at the end of the investment horizon. Steps involved in computi

What is post-acquisition integration, Post-acquisition integration In o...

Post-acquisition integration In order to have constructive discussions between organisations, it's strongly recommended that all participants in process adopt a set of ground r

Step-up (step down) notes, These types of securities have more ...

These types of securities have more than one coupon rate and each subsequent coupon rate is higher (or lower) than the previous coupon rate. For

Show the disadvantages of adjusted discount rate, Q. Show the Disadvantages...

Q. Show the Disadvantages of adjusted discount rate? (1) The risk premium rates resolute under this method are arbitrary. Therefore this method mayn't give objective results.

Leverage, ABC Ltd. Produces electronic components with a selling price per ...

ABC Ltd. Produces electronic components with a selling price per of Rs.100. Fixed cost amount to Rs.2,00,000/- 5000 units are produced and sold each year. Annua

Non-traditional mortgages, Non-traditional mortgages also referred to...

Non-traditional mortgages also referred to as Alternative Mortgage Instruments (AMIs), do not have level monthly payments, but employ some other structure of payment.

Identify an analytic theme for fictitious business, 1. identify an analytic...

1. identify an analytic theme or goal for a fictitious business or something that you are working on (e.g. Maximize revenue in a car dealership) 2. Build an Enterprise Bus Matri

Impact of the yield level in bonds, Different bonds trade at differen...

Different bonds trade at different yields though the coupon rate, maturity, and embedded options are same for them. Assuming that all the other bond characteristi

Beta value, Beta Value Risk is an important consideration while investi...

Beta Value Risk is an important consideration while investing in any security. It is the possibility that realised returns will be less than the returns expected. The degree, t

Who owns a credit union, Who owns a credit union? Explain. The term Cre...

Who owns a credit union? Explain. The term Credit unions are owned by their members. While credit union members put money in their credit union, they are not exactly "depositin

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd