Question

Which of the following statements is true of banker's acceptances (BAs)?

A) BAs are typically used for long-term financing.

B) BAs are guaranteed by the issuing bank.

C) BAs are mainly used in consumer transactions.

D) BAs are a form of short-term financing.

Answer 1

Banker's acceptances (BAs) are a form of short-term financing guaranteed by a bank.

Step-by-step explanation:

Banker's acceptances (BAs) are a form of short-term financing.

Unlike long-term financing options such as bonds, BAs are typically used for short-term needs. BAs are a type of promissory note that is guaranteed by a bank, making them a relatively secure form of financing.