Types of Payments/Assessment

Assessment

1 Letters of credit promise the beneficiary that funds will always be transferred

	immediately.
	based on the agreed tenor of the l/c.
	within 3 – 5 working days.
	in a reasonable time frame.

2 When funds are transferred 60 days after sight without a draft, this is a(n) ___________ letter of credit.

	acceptance
	negotiation
	deferred payment
	sight

3 The different types of letters of credit allow the buyer and seller to be

	risk-free.
	restricted.
	limited.
	flexible.

4 If payment is to be made at negotiation, the funds are paid to the beneficiary by the

	advising, issuing or confirming bank.
	issuing bank only.
	confirming bank only.
	advising bank only.

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