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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