Question20 Which of the following statements about commercial bills is incorrect? The face value of a commercial bill is payable at a specified future date Commercial bills are an important source of long-term finance for large and medium-sized firms A commercial bill pays no periodic interest A commercial bill is a discount security None of the options are incorrect ResetMaximum marks: 1 Flag question undefined

Question

BlackTom AI · Accepted Answer

Let's break down each statement about commercial bills to see what holds true and what doesn't.
Option 1: The face value of a commercial bill is payable at a specified future date. This is correct. Commercial bills are short-term debt instruments that are payable at maturity on a specified date, representing the face value to be paid then.
Option 2: Commercial bills are an important source of long-term finance for large and medium-sized firms. This is inaccurate. Commercial bills are typically short-term instruments used to finance working capital needs and liquidity, not long-term financing for firms. They are issued with maturities ranging from a few days to up to a year, usually well short of long-term funding horizons.
Option 3: A commercial bill pays no periodic interest. This statement is correct. Commercial bills are discount securities; the holder purchases the bill for less than its face value, and interest is implied by the discount rather than paid as periodic interest.
Option 4: A commercial bill is a discount security. This is true. By definition, commercial bills are issued at a discount to their face value and redeemed at par at maturity, with the difference representing implicit interest.
Option 5: None of the options are incorrect. Since Option 2 is incorrect, this statement is itself incorrect.

查看解析

登录即可查看完整答案

类似问题

Pho-Nance Ltd has a 180 day commercial bill facility with their Bank for $150,000 by issuing 90 day bills. The market is currently returning 6.36% for 90 day bills. Show the net cash inflow or outflow for Pho-Nance Ltd at the end of the bill facility (Day 180).

Which of the following about bank bill financing facility is NOT correct?

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单