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    Question

    What is forfeiting in the context of international trade?

    A Selling goods at a discount Correct Answer Incorrect Answer
    B An arrangement where a bank or finance company buys a negotiable instrument from an exporter at a discount Correct Answer Incorrect Answer
    C A method of insuring international shipments Correct Answer Incorrect Answer
    D A way to provide collateral for a loan Correct Answer Incorrect Answer
    E A system for managing export taxes Correct Answer Incorrect Answer

    Solution

    An arrangement where a bank or finance company buys a negotiable instrument from an exporter at a discount Forfeiting is a financial arrangement in international trade where a forfeiter (bank or finance company) purchases a negotiable instrument (e.g., Letter of Credit) from an exporter at a discount, providing immediate cash to the exporter while taking on the risk of payment from the importer.

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