Which of the following is a characteristic of a time draft?
A)It has no value given the deferred nature of the document.
B)It is generally not preferred in international transactions.
C)It is a negotiable instrument.
D)It is also known as a bill of lading.
E)It cannot be sold by an exporter.

Question

Quizplus · Accepted Answer

A time draft is a negotiable instrument, which means it can be bought and sold like any other financial instrument. It is a promise to pay at a future date and is used to finance the trade of goods and services. Option A is incorrect because a time draft does have value, although it is deferred until the future date of payment. Option B is incorrect because time drafts are commonly used in international transactions. Option D is incorrect because a bill of lading is a document that serves as a receipt of goods transported by a carrier, not a promise of payment. Option E is incorrect because time drafts can be sold by an exporter, as stated above.

Which of the Following Is a Characteristic of a Time