The Most Common Type of Trade Financing Involves a Letter

question 22

True/False

The most common type of trade financing involves a letter of credit.

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Definitions:

Required Return

The least profit anticipated by an investor from an investment in a certain asset, given its risk profile.

Cash Flows

The net amount of cash being transferred into and out of a business, especially as affecting liquidity.

Average Accounting Return

A measure of profitability calculated as the average net income divided by the average book value of investment over a period.

Annual Net Incomes

The total profit of a company after all expenses and taxes have been deducted from revenues for one year.