Multiple choice

Which strategy could an Australian exporter adopt to reduce the risk of non-payment?

  1. factoring

  2. hedging

  3. letter of credit

  4. unsecured note

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A letter of credit is a document issued by a bank that guarantees a buyer's payment to a seller will be received on time and for the correct amount, reducing non-payment risk.