Which financial instruments are accepted by ARC?

Which financial instruments are accepted by ARC?

• A. Bond
• B. Irrevocable Letter of Credit (LOC)
• C. ARC Cash Security Deposit (CSD)
• D. All of the above

Answer: (D)

ARC accepts several forms of financial security to guarantee payment and secure settlements. A Bond provides a guarantee backed by a surety; an Irrevocable Letter of Credit is a bank-guaranteed commitment that ARC can draw on if obligations aren’t met; a Cash Security Deposit is actual funds held by ARC as collateral. Because ARC recognizes all of these as valid guarantees, the option that includes all of the above is the best answer. In practice, the choice among them depends on the agency’s financial setup and the terms of the agreement, but each of these instruments is an acceptable form of ARC security.

ARC accepts several forms of financial security to guarantee payment and secure settlements. A Bond provides a guarantee backed by a surety; an Irrevocable Letter of Credit is a bank-guaranteed commitment that ARC can draw on if obligations aren’t met; a Cash Security Deposit is actual funds held by ARC as collateral. Because ARC recognizes all of these as valid guarantees, the option that includes all of the above is the best answer. In practice, the choice among them depends on the agency’s financial setup and the terms of the agreement, but each of these instruments is an acceptable form of ARC security.