Which of the following is true of a letter of credit?
A)It states that the bank will pay a specified sum of money to a beneficiary on presentation of particular,specified documents.
B)It is a document written by an exporter instructing an importer to pay a specified amount of money at a specified time.
C)It serves as a receipt,a contract,and a document of title.
D)It indicates that the carrier has received the merchandise described on the face of the document.
E)It allows buyers to obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

Question

Quizplus · Accepted Answer

A letter of credit is a document issued by a bank guaranteeing payment to a beneficiary (typically an exporter) upon presentation of specified documents that show the terms of the transaction have been fulfilled. The bank will pay the specified sum of money, usually in a specific currency, to the beneficiary once they have presented the required documents.

Which of the Following Is True of a Letter of Credit