Following negotiations on a transaction which result in use of a letter of credit for payment,the next step is for the exporter to
A) ship the goods to the importer.
B) ask the advising bank to open a letter of credit.
C) make a security deposit in the issuing bank.
D) All of the above
E) None of the above.

Question

Quizplus · Accepted Answer

Following negotiations,the exporter needs to send a pro-forma invoice to the importer which estimates the terms of the transaction as closely as possible.The exporter does not want to ship the goods until the payment terms have been arranged.The importer (not the exporter)initiates the letter of credit by asking the issuing bank (not the advising bank)to open it.And there is no reason for the exporter to make a security deposit.

Following Negotiations on a Transaction Which Result in Use of a Letter