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:

Reflexivity

The ability of an individual or system to reflect upon and adjust itself based on awareness of itself and its context.

Modern Institutions

Institutions that have emerged or evolved significantly in modern societies, including bureaucracy, the nation-state, capitalism, and scientific establishments.

Postmodernist

A philosophical perspective that critiques modernism, emphasizing the role of ideology, power, and culture in shaping human experience and knowledge.

Distanciation

The process or effect of becoming distant or disconnected, often used in social sciences to discuss the separation of people by time, space, or social relations.