Which of the Following Statements Is True

question 74

Multiple Choice

Which of the following statements is true?

• A)An FI that issues a documentary letter of credit to one of its customers implicitly believes that the customer's credit standing is not sufficiently high enough to engage in international transactions.
• B)An FI that issues a documentary letter of credit to one of its customers implicitly assumes the borrower's credit risk.
• C)An FI that issues a documentary letter of credit to one of its customers has created a contingent asset.
• D)None of the listed options are correct.

---

Definitions:

Americanize

The process of assimilating or causing someone to assimilate American customs, values, and ways of life.

Southeast Asia

A geographic region in Asia that includes countries such as Indonesia, Malaysia, Singapore, Thailand, and Vietnam, known for its cultural diversity and economic growth.

Credibility

The quality of being trusted and believed in, often used in contexts relating to individuals, organizations, and information sources.

Gulf of Tonkin Resolution

A 1964 Congressional resolution that authorized President Johnson to use military force in Vietnam without a formal declaration of war, significantly escalating U.S. involvement in the Vietnam War.