Question #s7-prep3-s7-q-391Function 3Fundamental

Government Bonds

What is the maximum maturity for a banker's acceptance?

Correct Choice: C

Banker's acceptance: max 270 days. Commercial paper: max 270 days. T-bills: max 1 year.

Complete Analysis & Legal Rationale

Banker's acceptances typically have a maximum maturity of 270 days (9 months). They are short-term money market instruments used to finance international trade, guaranteed by the accepting bank.

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:

Choice AIncorrect

Concept Trap

90 days is common but not the maximum.

Choice BIncorrect

Concept Trap

180 days is within the range but not the maximum.

Choice CCorrect

None

Matches the verified teaching point in the explanation.

Choice DIncorrect

Concept Trap

BAs do not extend to one year; they max out at 270 days.

Authorities & References:

Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.

Official SourceFINRA FINRA Series 7 Content Outline — General Securities Representative Examination (Series 7) Content Outline

Government Bonds

Complete Analysis & Legal Rationale

Distractor Autopsy (Why Other Options Are Traps)

Regulatory Authority & Citations: Primary Legal Sources

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