Financial Planner

Category - Investment Planning

What type of financial investment is guaranteed by a commercial bank?
  1. U.S. Series EE and HH Bonds
  2. Banker’s Acceptances
  3. Commercial Paper
  4. Money Market Accounts
Explanation
Answer: B - Banker’s acceptances are financial investments that are guaranteed by commercial banks. These investments are short-term debt instrument issued by a firm as part of a commercial transaction and then backed by commercial banks. The bank takes full and complete responsibility for repaying these loans to the holder. The acceptances are sold on a discounted basis and are common with international trade.
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