Question

________ is a person or association of persons in whose favor the letter of credit is opened.

• A. Applicant
• B. Issuing bank
• C. Beneficiary
• D. Advising bank
• E. None of the above

Answer 1

Answer: (C)

Beneficiary

A letter of credit is defined as an arrangement by means of which a bank acting at the request of a customer, undertakes to pay a third party a predetermined amount by a given date, according to agreed stipulations and against presentation of stipulated documents. A beneficiary is an exporter in whose favor the letter of credit is opened.

Hence, option (C) is the correct answer.