Question on: JAMB Commerce - 2024
A bill of exchange sold for less than its face value before maturity is said to be
A
protested
B
cleared
C
dishonored
D
discounted
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Correct Option: D
A bill of exchange sold for less than its face value before maturity is said to be discounted. This means the holder of the bill receives the present value of the bill, which is less than its face value, to get immediate cash. The difference between the face value and the discounted price represents the interest or discount charged by the financial institution or individual purchasing the bill.
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