Which of the Following Makes a Letter of Credit the Most

question 65

Multiple Choice

Which of the following makes a letter of credit the most popular method of payment in export transactions?

• A) the exporter cannot sell any letters of credit in its possession
• B) the method requires a limited amount of documentation and is easy to cancel
• C) the exporter bills customers with strong credit ratings
• D) the interests of the seller and buyer are protected simultaneously

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Definitions:

Vertically Integrated

A business strategy where a company controls multiple stages of production or distribution within the same industry, often from raw materials to final product delivery.

Optimal Order

The best or most efficient order quantity that minimizes total inventory costs, including order costs, holding costs, and stockout costs.

Supply Chain

The entire network of entities involved in creating and delivering a product or service, from raw materials to final consumption.

Normally Distributed

Describes a statistical distribution where data points are symmetrically distributed around the mean, forming a bell-shaped curve.