Microsoft Word - Exercises 2016.docx

Assume the time from acceptance to maturity on a 50,000,000 bankers acceptance (B/A) is 90 days. Further assume that the importing banks acceptance commission is 1.50 percent and that the market rate for 90-day B/As is 6.50 percent. Determine the amount the exporter will receive if he holds the B/A until maturity and also the amount the exporter will receive if he discounts the B/A with the importers bank.