The documentary letter of credit transaction serves as a means to assure the buyer and seller that the transaction is secured.

Question

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A documentary letter of credit provides assurance to both the buyer and the seller that the transaction is secured. It involves a bank guaranteeing the payment to the seller once the buyer satisfies the terms and conditions of the transaction. This reduces the risk of non-payment or non-delivery of goods for both parties.

The Documentary Letter of Credit Transaction Serves as a Means