Letters of Credit/Assessment

Unit 4.5-Letters of Credit

Introduction | Letters of Credit | Types | Summary | Resources | Activities | Assessment Go to Unit 4.1 | Unit 4.2 | Unit 4.3 | Unit 4.4 | Unit 4.5 | Unit 4.6 | Unit 4.7 | Unit 4.8 | Unit 4.9 Return to Trade Finance Module 4: Payment Methods

Assessment

1. A confirmed letter of credit includes a

a. funds transfer in US Dollars only.

b. a request for only a draft and commercial invoice.

c. a freely negotiable credit for the seller.

d. second bank's promise to pay upon complying document presentation.

2. Unless otherwise stated, all letters of credit are considered

a. revocable.

b. confirmed.

c. irrevocable.

d. transferable.

3. A transferable letter of credit allows the beneficiary to transfer the _____________ to a secondary beneficiary.

a. letter of credit

b. funds

c. documents

d. liability

(Correct answers: 1=d, 2=c, 3=a)