An exporter has to forgo a letter of credit when:
A)competing exporters also require letters of credit.
B)the importer is facing stiff competition from other importers.
C)the exporter is a dominant player in a noncompetitive market.
D)the importer is in a strong bargaining position.
E)he or she knows that the importer will default on payment.

Question

Quizplus · Accepted Answer

Sometimes an exporter who insists on a letter of credit will lose an order to one who does not require a letter of credit. Thus, when the importer is in a strong bargaining position and able to play competing suppliers against each other, an exporter may have to forgo a letter of credit.

An Exporter Has to Forgo a Letter of Credit When