The Use of a Letter of Credit in a Transaction

question 71

Multiple Choice

The use of a letter of credit in a transaction for the international sale of goods greatly reduces costs in the deal because the issuer

• A)must determine whether the contract conditions have been satisfied.
• B)does not inquire into whether the contract conditions have been met.
• C)pays only against the facts reflected in documents presented by the beneficiary.
• D)has the obligation to police the underlying contract.

---

Definitions:

Goal Setting

The process of identifying specific, measurable, achievable, relevant, and time-bound objectives.

Ambiguity

The quality of being open to more than one interpretation, leading to uncertainty or vagueness.

Achievable

Refers to a goal or objective that is possible to be accomplished with the resources and time available.

Choking

The phenomenon where an individual fails to perform to their usual level under pressure, typically in critical or high-stakes situations.