Types of Payments/Assessment

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.)