What is the drawback of using a letter of credit system?
A)The exporter is no longer entitled to preexport financing
B)The importer no longer trusts the exporter
C)The exporter is not guaranteed any payment
D)The importer must pay the bank a fee for the letter of credit

Question

Quizplus · Accepted Answer

One of the drawbacks of using a letter of credit system is that the importer must pay the bank a fee for the service. This fee can vary depending on the amount of the transaction and the complexity of the terms and conditions of the letter of credit. The other options are incorrect as they don't reflect the actual drawbacks of a letter of credit system.

What Is the Drawback of Using a Letter of Credit