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Draft

• An unconventional order in writing -signed by a person, usually the exporter, and addressed to the importer - ordering the importer or the importer's agent to pay, on demand (sight draft) or at a fixed future date (time draft), the amount specified on its face.

 
 Embedded terms in definition
 Agent
Demand
Future
Its
Order
Sight draft
Time draft
 
 Referenced Terms
 Bank draft: A Draft addressed to a bank.

 Banker's acceptance: Are money market instruments which are used to finance import or export transactions. These instruments are essentially checks and represents a bank's promise and ability to pay the face or principal amount on the stipulated maturity date. Maturities are generally less than 3months. Bankers Acceptances are viewed as money market instruments.A money market instrument created to facilitate international trade transactions. This instrument is highly liquid and safe because the risk of the trade transaction is transferred to the bank that "accepts" the obligation to pay the investor.BA
A Draft or bill of exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill. When the merchant presents a letter of credit to their bank, the bank discounts it and stamps ACCEPTED on it. Hence, a letter of credit then becomes a banker's acceptance. The banker's acceptances can be sold in the secondary market to money market mutual funds.Short-term, low-risk marketable securities arising from bank guarantees of business transactions; are sold by banks at a discount from their maturity value and provide yields slightly below those on negotiable CDs and commercial paper, but higher than those on Government of Canada treasury bills.A short-term credit investment created by a non-financial firm and guaranteed by a bank as to payment. Acceptances are traded at discounts from face value in the secondary market. These instruments have been a popular investment for money market funds. They are commonly used in international transactions.

 Payable through draft: A method of making payment that is used to maintain control over payments made on behalf of the firm by personnel in non central locations. The payer's bank delivers the payable through Draft to the payer, which must approve it and return it to the bank before payment can be received.A Draft drawn on the payer's checking account, payable to a given payee but not payable on demand; approval of the draft by the payer is required before the bank pays the draft.

 Payable through draft: A method of making payment that is used to maintain control over payments made on behalf of the firm by personnel in non central locations. The payer's bank delivers the payable through Draft to the payer, which must approve it and return it to the bank before payment can be received.A Draft drawn on the payer's checking account, payable to a given payee but not payable on demand; approval of the draft by the payer is required before the bank pays the draft.

 Security: Any claim that trades in the marketplace. Stocks, bonds, negotiable CDs, bankers acceptances are examples of securities. A bank loan is a private contract and it can not be bought or sold. Hence, it is not a security.According to the Securities Exchange Act of 1934, a security is any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit, for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any instrument commonly known as a security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, Draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.
A simpler definition is that a security is a piece of paper that can be assigned a value and sold, or any investment made with the expectation of a profit.Piece of paper that proves ownership of stocks, bonds and other investments.

 
 Related Terms
 Bank draft
Commercial draft
Payable through draft
Sight draft
Time draft
Trade draft

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