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1. Letter of credit (LC) is -
- A. A reminder given by banks to repay back its loans.
- B. A reminder given by banks to repay back its loans.
- C. A reminder given by banks to repay back its loans.
- D. A reminder given by banks to repay back its loans.
Answer: Option C
Explanation:
A letter of credit, or "credit letter" is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount.
In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.
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