Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Based on the following information, answer the questions below. The time from acceptance to maturity on a $2.25m Banker's Acceptance is 210 days. The importer's
Based on the following information, answer the questions below. The time from acceptance to maturity on a $2.25m Banker's Acceptance is 210 days. The importer's banks acceptance commission is 4% and the market rate for 210 day BA's is 8% a) What amount will the exporter receive if they holds the BA to maturity. Answer to the nearest dollar (2 marks) Answer: $ b) What amount will the exporter receive if he discounts the B/A. Answer to the nearest dollar (2 Marks) Answer: $ Note: the data contained in these questions is independent from that above c) The discounted amount on a BA an exporter receives is $1.1m, the amount the exporter receives if they hold to maturity is $1.2m and the face value is $1.3m on a 180 days Banker's Acceptance. i) Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter. Answer as a decimal to 4 decimal places. (2 Marks) Answer: ii) Determine the bond equivalent yield the exporter receives from discounting the B/A. Answer as a decimal to 4 decimal places. (2 Marks) Answer: d) From the list below, choose the method an importer is most likely to prefer to undertake trade finance. Based on the following information, answer the questions below. The time from acceptance to maturity on a $2.25m Banker's Acceptance is 210 days. The importer's banks acceptance commission is 4% and the market rate for 210 day BA's is 8% a) What amount will the exporter receive if they holds the BA to maturity. Answer to the nearest dollar (2 marks) Answer: $ b) What amount will the exporter receive if he discounts the B/A. Answer to the nearest dollar (2 Marks) Answer: $ Note: the data contained in these questions is independent from that above c) The discounted amount on a BA an exporter receives is $1.1m, the amount the exporter receives if they hold to maturity is $1.2m and the face value is $1.3m on a 180 days Banker's Acceptance. i) Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter. Answer as a decimal to 4 decimal places. (2 Marks) Answer: ii) Determine the bond equivalent yield the exporter receives from discounting the B/A. Answer as a decimal to 4 decimal places. (2 Marks) Answer: d) From the list below, choose the method an importer is most likely to prefer to undertake trade finance
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started