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Question1 Which one of the following statements is incorrect? If a commercial bank accepts the bill this enhances the credit quality of the debt arrangement The bank increases the creditworthiness of the bill by acting as the acceptor A bank can provide both a bill acceptance facility and a bill discount facility Bills are always sold at a discount to its face value An issuer will seek to sell the bill in the market at the highest yield ResetMaximum marks: 1 Flag question undefined
Options
A.If a commercial bank accepts the bill this enhances the credit quality of the debt arrangement
B.The bank increases the creditworthiness of the bill by acting as the acceptor
C.A bank can provide both a bill acceptance facility and a bill discount facility
D.Bills are always sold at a discount to its face value
E.An issuer will seek to sell the bill in the market at the highest yield
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Step-by-Step Analysis
Question analysis begins with identifying which statement is incorrect about bank bill acceptance and money market bills.
Option 1: 'If a commercial bank accepts the bill this enhances the credit quality of the debt arrangement' — This is true because an acceptance by a bank effectively guarantees payment at maturity, improving the credit standing of th......Login to view full explanationLog in for full answers
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