Question 1
(i) Jungalong Ltd is more likely to benefit as payment will be received be the goods are shipped. Le default risk is eliminated.

(ii) Yes, the risks are:
1. Delay in shipment/no shipment
2. Quality/quantity defers from terms of contract

(iii) Yes. LC is a better option for Jason. He is only required to pay for the goods in full when they arrived at the customs (SG's port). This eliminates the risks of shipment delay or no shipment.

Note that Jason will not be able to collect goods from the customs without paying the issuing bank in full in exchange for the documents required by the customs.

Question 2
(i) answers from lecture slides