Based on the following information, answer the questions below. The time from acceptance to maturity on a $4m Bankers Acceptance (BA) is 90 days. The importers banks acceptance commission is 5% and the market rate for 90 day BAs is 10%. A) What amount will the exporter receive if they hold the BA to maturity? Answer to the nearest dollar. (2 marks) Answer: Answer

B) What amount will the exporter receive if he discounts the BA? Answer to the nearest dollar (2 Marks) Answer: Answer Note: the data contained in these questions is independent from that above C) The discounted amount on a BA an exporter receives is $1,965,000, the amount the exporter receives if they hold to maturity is $1,985,000 and the face value is $2m on a 90 day Bankers Acceptance. i) Determine the bond equivalent yield the importers bank will earn from discounting the BA with the exporter. (Answer as a decimal to 4 decimal places) (2 Marks)

Answer: Answer

ii) Determine the bond equivalent yield the exporter receives from discounting the BA. Answer as a decimal to 4 decimal places (2 Marks) Answer: Answer D) From the list below, choose the method an exporter is most likely to prefer to undertake trade finance.

Answer: Answer