Credit Instruments Describe each of the following:a. Sight draft b. Ti
QUESTION
Credit Instruments Describe each of the following:a. Sight draft b. Time draft.c. Bankers acceptance.d. Promissory note.e. Trade acceptance.
a. Sight draft- is a negotiable instrument which gives the exporter the right to get the payment as soon as the draft is presented to the paying bank or the importer.b. Time draft- is that negotiable instrument on which payment is done on maturity date as decided among the contracting parties.c. Bankers acceptance.- the time draft, when accepted by the accepting bank, it is called bankers acceptance which the exporter can either hold till maturity or get it discounted with¦
ther bank to get immediate payment.d. Promissory note- is a negotiable instrument in which the maker promises the payee to pay a certain sum of money at a particular date.e. Trade acceptance- when the time draft is presented by the collecting bank to the importer, and he accepts the same, it is known as a trade acceptance.
ANSWER:
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