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      Question

      Under which type of Letter of Credit (LC) is advance

      payment allowed to the beneficiary before shipment?
      A Green Clause LC Correct Answer Incorrect Answer
      B Red Clause LC Correct Answer Incorrect Answer
      C Irrevocable LC Correct Answer Incorrect Answer
      D Revolving LC Correct Answer Incorrect Answer
      E Confirmed LC Correct Answer Incorrect Answer

      Solution

      A Red Clause LC allows the beneficiary (exporter) to receive advance payment before shipping goods. It supports procurement or production ahead of dispatch and is useful in international trade finance.

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