As Compared to Letters of Credit (LCs), Standby Letters of Credit

question 58

True/False

As compared to letters of credit (LCs), standby letters of credit (SLCs) typically are used to cover contingencies that potentially are more severe and which may not be trade related.

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Definitions:

Merger or Acquisition

The process by which companies combine (merger) or one company purchases another (acquisition) to expand their operations or market share.

Outsourced Function

A task or operation that is performed by external parties rather than by in-house staff.

In-house

Referring to activities or operations that are carried out within an organization by its own members or resources, rather than being outsourced.

Outsourcing Arrangements

Agreements where one company hires an external party to perform services or create goods that traditionally were performed in-house.