Financial and Legal Costs/Assessment
|Unit 4.8-Financial and Legal Costs|
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)