Which of the Following Is True of a Letter of Credit

question 8

Multiple Choice

Which of the following is true of a letter of credit in international trade?

• A)No cash deposit or collateral is required from the importer.
• B)The exporter pays the trusted third party (usually a bank) a fee for the service.
• C)It becomes a financial contract between the trusted third party (usually a bank) and the exporter.
• D)It is issued by the exporter at the request of the importer.
• E)The creditworthiness of the importer is irrelevant when issuing a letter of credit.

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Definitions:

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