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(a) Explain 'Letter of credit'. (3 marks) (b) Elaborate how letter of credit facility can mitigate the risks in international trade. (3 marks) (c) By

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(a) Explain 'Letter of credit'. (3 marks) (b) Elaborate how letter of credit facility can mitigate the risks in international trade. (3 marks) (c) By using a diagram, show the derivation of letter of credit which arises from an international trade. (Hint: 7 steps) (14 marks) Question 5 (a) Explain the following terms (i) Information asymmetry. (4 marks) (ii) Moral hazard. (a) Explain 'Letter of credit'. (3 marks) (b) Elaborate how letter of credit facility can mitigate the risks in international trade. (3 marks) (c) By using a diagram, show the derivation of letter of credit which arises from an international trade. (Hint: 7 steps) (14 marks) Question 5 (a) Explain the following terms (i) Information asymmetry. (4 marks) (ii) Moral hazard

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