A _____ issued by a bank is a promise by that bank to make a loan if certain conditions are met.
A) compensating balance
B) cleanup loan
C) letter of credit
D) line credit
E) revolver

Question

Quizplus · Accepted Answer

A letter of credit is a document issued by a bank that guarantees payment to a seller of goods or services, as long as the seller meets the conditions specified in the letter. It is essentially a promise by the bank to make a loan to the buyer of the goods or services, and it provides a level of reassurance to the seller that they will receive payment for their goods or services.

A _____ Issued by a Bank Is a Promise by That