A Documentary Credit Reduces the Uncertainty of a Transaction by

question 31

Multiple Choice

A documentary credit reduces the uncertainty of a transaction by

• A) creating guarantees of payment by the importer.
• B) providing insurance in case of loss or damage to the merchandise.
• C) allowing extended repayment terms for the importer.
• D) clearly establishing the acts that the exporter must carry out in order to receive payment.

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Price-Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings.

Return On Total Assets

A financial ratio that indicates how effectively a company is using its assets to generate profit, measured by dividing net income by total assets.

Earnings Per Share

This is a financial ratio that measures the amount of net income earned per share of stock owned.