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 Banker's Acceptance.

i) Determine the bond equivalent yield the importer's 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

Payment in advance

Payment in arrears

Letter of Credit

Forfaiting