Export/import Financing in Which a Bank Acts as an Intermediary

question 197

Multiple Choice

Export/import financing in which a bank acts as an intermediary without accepting financial risk is called ________.

• A) documentary collection
• B) letter of credit
• C) buyback
• D) open account

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Definitions:

Coupon Rate

The annual interest yield on a bond, displayed as a percentage of its principal value.

Tax Rate

The scale at which the government levies taxes on the financial gains of individuals or corporations.

Face Value

The nominal value printed on a bond or other financial instrument; it is the amount paid to the holder at maturity, though the market value can differ.

Weighted Average Cost of Capital (WACC)

The rate that a company is expected to pay on average to all its security holders to finance its assets, a key factor in capital budgeting decisions.