DEFINITION of 'Acceptance Market'

Investment market based on short-term credit instruments. An acceptance is a time draft or bill of exchange that is accepted as payment for goods. A banker's acceptance, for example, is a time draft drawn on and accepted by a bank, which is a common method of financing short-term debts in international trade including import-export transactions.

BREAKING DOWN 'Acceptance Market'

The acceptance market is useful to exporters, who are immediately paid for exports; for importers, who do not need to pay until possession of goods occurs; for the financial institutions, that are able to profit from the acceptances; and for investors who trade acceptances in the secondary market. Acceptances are sold in the secondary market at a discount from face value (similar to the Treasury Bill market), at published acceptance rates.

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RELATED FAQS
  1. How do I obtain a banker's acceptance?

    Find out how to obtain a banker's acceptance, why you should treat it like a short-term loan and when you would most likely ... Read Answer >>
  2. Why is marketing important to a company in the utilities sector?

    Find out what a banker's acceptance is, how it works, and why it should be considered a safe and liquid money market instrument. Read Answer >>
  3. What is the Activities of Daily Living (ADL) hierarchy scale?

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  4. How can I look up average banker's acceptance yields?

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