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      Question

      Which of the following types of documentary credit

      offers guaranteed payment to the seller by a third-party bank, even if the buyer defaults?
      A Revocable Letter of Credit Correct Answer Incorrect Answer
      B Irrevocable Letter of Credit Correct Answer Incorrect Answer
      C Confirmed Letter of Credit Correct Answer Incorrect Answer
      D Sight Letter of Credit Correct Answer Incorrect Answer
      E Unconfirmed Letter of Credit Correct Answer Incorrect Answer

      Solution

      A Confirmed Letter of Credit involves the confirming bank providing a guarantee to the seller that payment will be made, even if the buyer's bank defaults. This provides extra security to the seller.

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