It is guaranteed, that the letter issued by the import's bank stating that it will honour the report bills to the bank of the exporter on to a certain account. Identity the document.

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Solution

Letter of credit: a letter issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.

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The document containing the guarantee of a bank to honour drafts drawn on it by an exporter is

(a) Letter of hypothetication

(b) Letter of credit

(d) Bill of exchange

The document containing a guarantee of a bank to honour drafts drawn on it by an exporter is

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