Types of Payments/Assessment
1. Letters of credit promise the beneficiary that funds will always be transferred
- a. immediately.
- b. based on the agreed tenor of the l/c.
- c. within 3 – 5 working days.
- d. in a reasonable time frame.
2. When funds are transferred 60 days after sight without a draft, this is a(n) ___________ letter of credit.
- a. acceptance
- b. negotiation
- c. deferred payment
- d. sight
3. The different types of letters of credit allow the buyer and seller to be
- a. risk-free.
- b. restricted.
- c. limited.
- d. flexible.
4. If payment is to be made at negotiation, the funds are paid to the beneficiary by the
- a. advising, issuing or confirming bank.
- b. issuing bank only.
- c. confirming bank only.
- d. advising bank only.
(Correct answers: 1=B, 2=C, 3=D, 4=A.)