________ Is a Specialized Technique to Eliminate the Risk of Nonpayment

question 65

Multiple Choice

________ is a specialized technique to eliminate the risk of nonpayment by importers in instances where the importing firm and/or its government is perceived by the exporter to be too risky for open account credit.

• A) Forfeiting
• B) Marketable Bank Shares
• C) Forfaiting
• D) Banker's Acceptances

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Premium

An amount paid in addition to a standard price or rate, often for insurance or an enhanced level of service or coverage.

Interest Expense

The cost incurred by an entity for borrowed funds, recognized as a non-operating expense on the income statement.

Contractual Interest Rate

The agreed-upon rate of interest that is to be applied on the principal amount of loans, bonds, or other forms of debt as specified within a contract.