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    Question

    The exporter is provided finance for the purchase of

    raw materials and processing them into finished products, this type of finance is called
    A Pre-Shipment Finance Correct Answer Incorrect Answer
    B post-Shipment Finance Correct Answer Incorrect Answer
    C Deferred Export Finance Correct Answer Incorrect Answer
    D Retail finance Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The exporter is provided finance even for the purchase of raw materials and processing them into finished products but this finance can be provided only when the exporter has firm order from the importer and the importer has also given an anticipatory Letter of Credit from his bank. So, against the export order received from the importer, the exporter is given finance by his bank which is called pre-shipment export finance.

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