Types of LC

Under an ________ documentary credit, the commitment to pay for seller belong to both the issuing and the advising banks

• confirmed

• unconfirmed

• revocable

• irrevocable

The type of L/C considered as a means of funding for exporters:

• Revolving credit

• Red clause credit

• Irrevocable transferable credit

• Irrevocable credit

The importer and the exporter established a long-term trading relationship to deliver goods on a regular basis without issuing different individual L/C. This is an example of:

• Transferable credit

• Back-to-back credit

• Standby credit

• Revolving credit

There are _____ main parties to a basic documentary letter of credits transaction.

• 6

• 3

• 4

• 5

When the exporter detects any additional amendments of the L/C, who should they contact first?

• The Advising Bank

• The Importer

• The Paying Bank

• The Issuing Bank

______ are used most frequently in transactions involving buyers in developing countries.

• Confirmed, irrevocable documentary credit

• Unconfirmed

• Revocable

• Irrevocable

Revocable credits are of great disadvantage to the ______

• seller

• buyer

• bank

• importer

_______ documentary credit gives the buyer and/or issuing bank the ability to amend or cancel the credit at any time right up to the moment of intended payment without approval by, or notice to, the seller.

• revocable

• irrevocable

• confirmed

• unconfirmed