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 Ann's bank acts as an intermediary without accepting financial risk it is called ________.
A) documentary collection
B) buyback
C) letter of credit
D) advance payment

Question

Quizplus · Accepted Answer

Documentary collection is a method of payment where the bank acts as an intermediary to facilitate trade between the buyer and seller without accepting financial risk. This option is appropriate for Ann Wang's situation where she is exporting to international markets and may not have established relationships with buyers and banks in these markets. It provides a level of security for both parties and allows for smooth completion of the transaction. The other options - buyback, letter of credit, and advance payment - may not be the best choices for Ann Wang's business needs and situation.