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

Question

Quizplus · Accepted Answer

Bankers' acceptances are used extensively in international trade because they provide a guarantee from a bank that a buyer's payment to a seller will be received on time and for the correct amount. This is particularly useful when the creditworthiness of one trader is unknown to the trading partner, as it reduces the risk of non-payment.

Which of the Following Is Used Extensively in Foreign Trade