If Shipment Is Made Under a Time Draft, the Exporter

question 55

True/False

If shipment is made under a time draft, the exporter is paid once shipment has been made and the draft is presented to the buyer for payment.

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Definitions:

European Options

Financial derivatives that give the holder the right to buy or sell an underlying asset at a specified price, but only on the option's expiration date.

Payoff

The return received from an investment or the outcome of a decision or transaction.

Underlying Asset

The financial instrument (such as stocks, bonds, commodities) upon which derivatives or other financial instruments (e.g., options) are based.

Derivative Securities

Financial instruments whose value is derived from the value of one or more underlying assets or benchmarks.