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In a Documentary Collection Transaction,the Exporter Has an Increased Risk

Question 23

Multiple Choice

In a documentary collection transaction,the exporter has an increased risk that is not so prominent in a letter of credit transaction? What is that risk?


A) If the importer does not pay for the goods,the exporter will have to take action in the country where the importer is to force the return of the goods.
B) In a documentary collection transaction,the exporter has had to pay a fee to a bank for the documentary collection that is not required in a letter of credit transaction.
C) If the importer rejects the goods in a letter of credit transaction,the exporter still receives payment,but if the importer rejects the goods in a documentary collection transaction,the exporter does not get paid.
D) In a documentary collection,the exporter is depending on the importer to make payment and take title to and possession of the goods.If the importer does not do that,the exporter has an inventory of unsold goods in a foreign country.

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