Thursday, June 11, 2015

Day 52 - Questions

Day 52 - Line of Credit, Letter of Credit

( Line of Credit, Letter of Credit )

Recommended Study links - (Go through these topics before attempting MCQs)

1.  Line of Credit is generally provided to business house on which type of account?
a.  Savings Account
b.  NRO Account
c.  Demat Account
d.  Cash Credit Account

2.  Which of the following is not true regarding Line of Credit?
a.  Line of Credit is given to the corporate for business purpose
b.  Line of Credit is a loan/advance facility (credit) with a max. limit (line)
c.  Line of Credit is generally provided in Cash Credit (CC) accounts
d.  No collateral is needed by the corporate to avail the Line of Credit facility

3.  Letter of Credit is a facility used for the purpose -
a.  Loan / advance for SMEs
b.  Letter for guarantee of payment in international trade
c.  Letter from government to avail credit by the farmers
d.  None of these

4.  Which of the following is related with Letter of Credit?
a.  Line of Credit
b.  Bill of Lading
c.  Bill Discounting
d.  NOSTRO accounts

5.  Which of the following is correct difference/s between Letter of Credit and Bank Guarantee?
a.  In Letter of Credit, amount is paid only if the contract is satisfied; whereas in Bank Guarantee, amount is paid only if the contract is breached
b.  Letter of Credit insures a transaction proceeds as planned; Bank Guarantee insures from loss or damage due to non-performance by the other party
c.  Both (a) and (b)
d.  None of the above

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