For an importer, which of the following is a disadvantage of using a l

QUESTION

For an importer, which of the following is a disadvantage of using a letter of credit for international transactions?

A. It results in the importer losing control over the process of trading.

B. It reduces the exporter’s level of trust in the importer.

C. It reduces the importer’s ability to borrow funds for other purposes.

D. It requires the importer to repay the loan even before the merchandise is sold.

E. It is not issued at the importer’s request.

ANSWER

C