Question

Factors that influence the yield at which a commercial bill will be discounted are:

Answer 1

Factors which will decide the rate at which the commercial bill will be discounted at are as follows-

A. The creditworthiness of the borrower is one of the most important factor for deciding upon the rate at which commercial bill will be discounted

B. The past performance related to the payments of different borrowers is also related to deciding upon the rate at which the commercial bank will be discounted

C. It also depends upon various macro factors like inflation and interest rate risk because this will be keeping on changing the overall demand and supply of the money in the economy

D it also depends upon the history of the bank and the earlier rate at which the commercial bills are discounted in the bank

E. It also depends on the bargaining power of the lender with the bank