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Question
The document containing the guarantee of a bank to honour drafts drawn on it by an exporter is ________.
The document containing the guarantee of a bank to honour drafts drawn on it by an exporter is ________.
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Solution
The correct option is B Letter of Credit
Letter of hypothetication written agreement, which authorizes a bank or lender to repossess and sell the pledged item in case of a default.A letter of credit is a guarantee issued by the importer's bank that it will honour up to a certain amount the payment of export bills to the bank of the exporter.A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment.It is a conclusive receipt, i.e. an acknowledgement that the goods have been loaded; and it contains or evidences the terms of the contract.
A bill of exchange is a binding agreement by one party to pay a fixed amount of cash to another party as of a predetermined date or on demand. Bills of exchange are primarily used in international trade.
Letter of hypothetication written agreement, which authorizes a bank or lender to repossess and sell the pledged item in case of a default.
A letter of credit is a guarantee issued by the importer's bank that it will honour up to a certain amount the payment of export bills to the bank of the exporter.
A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment.It is a conclusive receipt, i.e. an acknowledgement that the goods have been loaded; and it contains or evidences the terms of the contract.
A bill of exchange is a binding agreement by one party to pay a fixed amount of cash to another party as of a predetermined date or on demand. Bills of exchange are primarily used in international trade.
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