Which of the following is used extensively in foreign trade when the creditworthiness of one trader is unknown to the trading partner?
A)Repos
B)Bankers' acceptances
C)Eurodollars
D)Federal funds
E)none of the above

Question

Quizplus · Accepted Answer

Bankers' acceptances are a type of financial instrument that is widely used in international trade when the creditworthiness of a trader is unknown to their trading partner. Bankers' acceptances are essentially a promise by a bank to pay a specified amount on a specific date, and they are often used to facilitate trade transactions between companies in different countries. Because the bank guarantees payment, the trading partner can be more confident in their ability to receive payment for their goods or services.

Which of the Following Is Used Extensively in Foreign Trade