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Assume the time from acceptance to maturity on a $2,000,000 bankers acceptance is 60 days. Further assume that the importing banks acceptance commission is 1.25
Assume the time from acceptance to maturity on a $2,000,000 bankers acceptance is 60 days. Further assume that the importing banks acceptance commission is 1.25 percent and that the market rate for 60-day B/As is 7 percent. a. Determine the amount the exporter will receive if he holds the B/A until maturity b. Determine the amount the exporter will receive if he discounts the B/A with the importers bank.
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