Matt is a computer dealer in Italy.Marion owns an electronics store in the United States.Matt agrees to sell Marion $10,000 worth of computers.Matt wants Marion to provide him with a guarantee from a bank.The guarantee from the bank would require the bank to pay Matt in the event that Marion fails to pay.What is the guarantee from the bank called?
A) letter of credit
B) payment guarantee
C) lease guarantee
D) finance lease guarantee
E) sale guarantee

Question

Quizplus · Accepted Answer

The guarantee from the bank that Matt is requesting from Marion is called a letter of credit. A letter of credit is a contractual agreement between a buyer's bank and a seller that guarantees payment to the seller in the event that the buyer is unable or unwilling to pay for the goods or services. This is a common practice in international trade transactions to ensure that both parties are protected.

Matt Is a Computer Dealer in Italy