The Combination of a Letter of Credit, a Sight Draft

question 6

Multiple Choice

The combination of a letter of credit, a sight draft, and an order bill of lading protect both parties in international transactions from which of the following?

• A) the risk of noncompletion
• B) the risk of foreign exchange risk (when combined with a various hedging techniques)
• C) the risk that financing will not be available due to foreign exchange risk
• D) All of these risks are reduced when using these trade implements.

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Definitions:

Carbon Source

A molecule used by an organism as a source of carbon for growth and development; can be organic, such as glucose, or inorganic, like carbon dioxide.

Energy Source

A resource that provides power for heat, light, or motion, or fuel for organisms' metabolic processes.

Leaf Color

The color of leaves, determined by pigments such as chlorophyll and anthocyanins, and indicative of health or seasonal changes.