What Is the Biggest Advantage of Using a Letter of Credit

question 80

Multiple Choice

What is the biggest advantage of using a letter of credit system?

• A)The exporter is guaranteed pre-export financing.
• B)It allows the importer time to resell the merchandise before requiring payment.
• C)The trust is established,for the importer and exporter,because of a reputable bank.
• D)It guarantees the importer extra funds for other purposes.

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Definitions:

Implied Contracts

Agreements that are not written or spoken but are understood by the actions or behaviors of the parties involved.

Express Contracts

Contracts in which the terms and conditions are explicitly stated, either orally or in writing, between the parties involved.

Executory

In legal contexts, referring to contracts or obligations that are yet to be fully performed or completed by one or more parties.

Implied-In-Law

A term or condition not expressly stated but assumed to exist due to the nature of the transaction or the parties’ relationship, as recognized by law.