Howard bought goods from Williams. Howard sent Williams a draft covered by a letter of credit issued by First National Bank. Is the bank required to investigate to determine whether the goods sent by Williams conform to the contract?
No. The issuer of a letter of credit has no duty to verify that the papers are supported by the facts or that the underlying transaction has been performed. It is thus immaterial whether the goods sold by the seller conform to the contract as long as the seller tenders the documents specified by the letter of credit.
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Indicate whether the statement is true or false
Used Car Center Inc. allows salespeople to charge different customers different prices for essentially the same automobile depending on how good the customer is at negotiating the price. In this scenario, the company uses a:
a. two-part pricing tactic. b. price lining tactic. c. flexible pricing tactic. d. price skimming tactic.
According to the signaling theory that has been proposed to explain differences in firms' capital structures, which of the following actions by the management is taken as a signal that a firm's future prospects are not bright (i.e., not good)? (Assume that the firm has multiple financing alternatives.)
A. A small company raises new capital by issuing of new shares of common stock. B. A mature company raises new capital by issuing of new shares of common stock. C. A small company maintains a reserve borrowing capacity that can be used if good investments are discovered in the future. D. A mature company maintains a reserve borrowing capacity that can be used if good investments are discovered in the future. E. A mature company raises new capital by issuing debt beyond the amount that is indicated by its normal target capital structure.
Which of these is not a procedural requirement for judicial review of an agency decision:
a. ripeness b. diversity c. exhaustion d. jurisdiction e. standing