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.

  1. Bankable Funds

    Forms of payment that are accepted at financial institutions. ...
  2. Demand Draft

    A demand draft is a method used by individuals to make transfer ...
  3. Accepting Risk

    Accepting risk occurs when a business acknowledges that the potential ...
  4. Foreign Draft

    A foreign draft is an alternative to foreign currency.
  5. Treasurer's Draft

    A type of bank draft that is payable through a designated bank. ...
  6. Negotiable

    1. Describing the price of a good or security that is not firmly ...
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