Which of the following is commonly used to finance international trade?

The use of Bankers' Acceptances in financing international trade is well-established due to their functionality and reliability. A Bankers' Acceptance is essentially a promise by a bank to pay a specified amount at a future date, which is drawn from a buyer's account. This instrument acts as a guarantee to the seller that payment will be made, even if the buyer defaults or fails to pay for the goods or services.

International trade often involves a level of risk, as transactions may occur between parties who are located in different countries and may not have an established credit relationship. The role of a bank in guaranteeing payment reduces this risk, thereby facilitating trade. Since the acceptances are backed by the credit of the bank, they are considered a secure form of financing that can be easily transferred or sold in the financial markets.

In contrast, the other options do not primarily cater to the unique needs of international trade financing. Commercial paper is typically used for short-term financing by corporations and lacks the backing of a bank for international transactions. U.S. Treasury Bills are considered safe investments but are not specifically used for trade financing. General obligation bonds are municipal bonds that fund public projects and are not directly related to trade financing activities. Thus, the distinct characteristics of Bankers'