Question

A ________ is an agreement by the person who issues the letter to pay a sum of money on receipt of an invoice and other documents.Multiple ChoiceA. commercial bondB. letter of creditC. letter of acknowledgementD. negotiated credit instrumentE. recognizance

Answer 1

Answer: B

Step-by-step explanation:

Letter of credit is a document issued by a bank on behalf of someone so that payment could be made to such person, this is done with some conditions attached. Letter of credit could serve as a document for negotiation on behalf of who is to benefit from it.

Answer 2

Answer: The correct answer is "B. Letter of credit".

Explanation: A letter of credit is an agreement of the person who issues the letter to pay a sum of money on receipt an invoice and other documents.

Is a payment mechanism used in international trade.