Financial and Legal Costs/Assessment

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)