Which of the following statements is incorrect? A) Bankers' acceptances are created by international trade. B) Bankers' acceptances are sold in large amounts, usually $1 million or more. C) The cost of financing using a bankers' acceptance is calculated by : i_BA = [(Discount + Fee) / (Face Value - discount - fee)] × (365 / maturity in days) D) The cost to the bank that guarantees a company's bankers' acceptances is the yield on the bankers' acceptances plus the stamping fee.

Question

Quizplus · Accepted Answer

The cost to the bank that guarantees a company's bankers' acceptances is not the yield on the bankers' acceptances plus the stamping fee; it is typically just the stamping fee. The yield is what investors earn, not a cost to the bank.

Which of the Following Statements Is Incorrect