What Is the Drawback for the Importer in Using a Letter

question 107

Multiple Choice

What is the drawback for the importer in using a letter of credit?

• A)The importer loses control over the process of trading.
• B)The system is skewed heavily in favor of the exporter.
• C)It may reduce his ability to borrow funds for other purposes.
• D)The loan must be repaid even before the merchandise has been solD.

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Definitions:

Strategic Choices

Decisions made by an organization's leaders about the direction and scope of the organization, influencing its competitive position and future success.

Diversification

A growth strategy to expand by acquisition of or investment in new and different business areas.

Complexity

The state or quality of being intricate or complicated.

Diversification Strategy

A business policy of increasing the variety of products or markets served to spread risk and create opportunities for growth.