A US importer needs to purchase goods from a German exporter. To facilitate this transaction, the importer's bank creates a banker's acceptance. Who is primarily responsible for payment at maturity?

Why C — The accepting bank, which guarantees payment

Once a bank 'accepts' the time draft, it becomes primarily liable for payment at maturity. The bank's acceptance transforms the instrument into a high-quality money market security that can be sold in the secondary market. While the importer remains ultimately responsible for reimbursing the bank, the accepting bank's guarantee is what gives the instrument its creditworthiness and marketability in the money market.