Trade Finance-i

Islamic letter of credit is one the instrument that fall under the trade finance.

• True

• False

There are two types of Islamic letter of credit that mainly use in the world.

• True

• False

When a bank act as an agent behalf of a client for Islamic letter of credit, it is considered as ________ LC.

• Musharakah

• Wakalah

• Murabahah

• Hawalah

Musyarakah Letter of credit is where the sale of good at cost plus profit as agreed by both parties.

• True

• False

When the bank provides guarantee to the settlement of the loan by customer, it refers to the contract of ______ under LG.

• al- Qard

• bay' al- dayn

• ijarah

• kafalah

Financial transaction whereby a business sells its invoice/ account receivables to the third party is called _______.

• murabahah

• letter of guarantee

• factoring

• letter of credit

Factoring involves all three parties in the transaction, except ______.

• the creditor

• the guarantor

• the debtor

• the factor

Invoice discounting and factoring is the similar transaction which involves the sale of receivables.

• True

• False

Banker's acceptance issued by the bank to secure the transaction between exporter and importer.

• True

• False

__________ has the right to receive the payment made by ________ for the invoice amount.

• the debtor, the factor

• the account seller, the debtor

• the factor, the debtor

• the account seller, the factor