A ________ is an agreement between an exporter's bank and the foreign buyer's bank that guarantees payment to the exporter for a specific shipment of goods.

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A letter of credit is a guarantee of payment issued by the importer's bank to the exporter, promising to pay a specific amount for a specific shipment of goods. This reduces the risk for the exporter as they know they will be paid for their goods. Bank drafts, COD, and line of equity do not offer the same level of security to the exporter.

A ________ Is an Agreement Between an Exporter's Bank and the Foreign