A Letter of Credit Reduces an Importer's Ability to Borrow

Multiple Choice

A letter of credit reduces an importer's ability to borrow funds for other purposes because:

A) the importer has to request for it.
B) it is a financial liability against the importer.
C) the importer has to pay for the merchandise even before receiving the documents.
D) the importer has to pay even if the conditions stated in the letter are not satisfied.
E) it does not give the importer any extra time to resell the merchandise before requiring payment.