A ___________ L/C is issued by one bank and confirmed by another, obligating both banks to honor any drafts drawn in compliance.
A) confirmed
B) transferable
C) unconfirmed
D) irrevocable

Question

Quizplus · Accepted Answer

A confirmed L/C is one where the bank issuing the L/C has obtained a confirmation of the credit from another bank (usually in the seller's country) which is called the confirming bank. The confirming bank adds its own undertaking to that of the issuing bank, which gives an additional layer of protection to the seller. This means that if the issuing bank defaults, the seller can still look to the confirming bank for payment.

A ___________ L/C Is Issued by One Bank and Confirmed