A(n)________ is guaranteed by both the exporter's bank in the country of export and the importer's bank in the country of import.
A) confirmed letter of credit
B) transferrable letter of credit
C) revocable letter of credit
D) irrevocable letter of credit

Question

Quizplus · Accepted Answer

A confirmed letter of credit is a type of letter of credit that is guaranteed by both the exporter's bank and the importer's bank. This means that both parties are protected in the event that one party fails to fulfill their obligations. A transferrable letter of credit can also be guaranteed by both banks, but it allows for the transfer of the credit to a third party, which may not be applicable in this scenario. A revocable letter of credit can be changed or canceled by either party, which does not provide sufficient protection. An irrevocable letter of credit is guaranteed by the issuing bank, but not necessarily both banks, and therefore may not provide sufficient protection for both parties.

A(n)________ Is Guaranteed by Both the Exporter's Bank in the Country