Which of the Following Financing Methods Entails the Greatest Risk

question 105

Multiple Choice

Which of the following financing methods entails the greatest risk for exporters?

• A)Documentary collection
• B)Advance payment
• C)Letter of credit
• D)Open account

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Definitions:

Output Effect

The impact on economic output and productivity resulting from a change in the level of economic activity.

Wage Rate

The amount of money paid to workers per unit of time, often hourly or monthly, for their labor.

MRP

Marginal Revenue Product, the additional revenue generated from using one more unit of a factor of production.

Rent

Payment made periodically by a tenant to a landlord in exchange for the use of land, a building, or another property.