Corporate Bonds
A customer asks about a money market instrument used to finance international trade. The instrument is guaranteed by a bank. Which security is being described?
If you see "importing," "exporting," or "international trade," the answer is probably bankers' acceptance.
Complete Analysis & Legal Rationale
Bankers' acceptances (BAs) are time drafts used primarily to finance international trade (importing and exporting). When a bank "accepts" the draft, it guarantees payment at maturity. BAs typically have maturities of 30 to 180 days.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.