What is an advantage of having a letter of credit?
A) It allows payment for merchandise after its delivery.
B) It facilitates an exporter to obtain pre-export financing.
C) It allows an exporter to get a higher price for his or her goods.
D) It helps exporters incur lower shipping costs.
E) It does not require the importer to pay any fee.

Question

Quizplus · Accepted Answer

A letter of credit provides assurance to the exporter that they will receive payment, which can be used to secure pre-export financing from banks or financial institutions.

What Is an Advantage of Having a Letter of Credit