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    Question

    A bill of exchange was accepted by the drawee and later

    discounted by drawer with bank. On maturity, the drawee defaulted. Who is liable?
    A Drawee Correct Answer Incorrect Answer
    B Bank Correct Answer Incorrect Answer
    C Drawer Correct Answer Incorrect Answer
    D Both drawee and drawer Correct Answer Incorrect Answer

    Solution

    Bank will recover from drawer if drawee defaults. Drawer’s contingent liability becomes actual.

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