Archive:Financial and Legal Costs/Assessment

1. Letter of credit fees are

a. negotiable, but extensive.

b. not negotiable and extensive.

c. too high to pay no matter what the risk.

d. very reasonable and easy to absorb.

2. The cost for a documentary collection is less expensive than a letter of credit because the bank

a. does not transfer the funds.

b. does not transfer the documents.

c. does not exchange the currency.

d. does not assume any risk.

3. Export credit insurance rates are based on

a. the country of origin and company bankruptcy rates.

b. the country of destination, company risk and value of credit.

c. the laws of the countries involved in the transaction.

d. the contract written and signed by the buyer and seller.

4. Letter of credit fees are generally

a. paid for by the applicant.

b. paid for by customs.

c. shared by the applicant & beneficiary.

d. paid by the freight forwarder.

(Correct answers: 1=A, 2=D, 3=B, 4=C)

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