Letters of credit are popular among traders because banks assume most of the risks.

Name: Letters of credit are popular among traders because banks assume most of the risks.
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Question

Quizplus · Accepted Answer

This is true. Letters of credit are financial instruments issued by banks that guarantee payment to a seller in a transaction, provided certain conditions are met. This provides a level of assurance to both the buyer and seller, as the bank is taking on the risk of payment.

Letters of Credit Are Popular Among Traders Because Banks Assume