Why Does a Letter of Credit Reduce an Importer's Ability

question 125

Multiple Choice

Why does a letter of credit reduce an importer's ability to borrow funds?

• A)The importer has to pay fees to the bank for the letter of credit.
• B)It is a financial liability against the importer.
• C)The importer has to pay for the merchandise immediately.
• D)The importer has to pay for unsatisfactory products.

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