Scenario: Wang's Techno Toys
Ann Wang has been successful in the domestic market selling high-tech toy products.But facing stiff competition at home,Ann has entered international markets by direct exporting.
-If Techno Toy's bank acts as an intermediary without accepting financial risk,it is demonstrating which of the following methods of export/import financing?
A)Documentary collection
B)Buyback
C)Letter of credit
D)Advance payment

Question

Quizplus · Accepted Answer

In this scenario, Techno Toy's bank is acting as an intermediary without accepting financial risk, which is a characteristic of documentary collection. This method involves the exporter sending shipping and payment documents through banks to the importer's bank, which releases the documents only if the importer pays for the goods. This method does not involve extending credit or accepting financial risk. Therefore, the best choice is A) Documentary collection.