The Use of a Letter of Credit in a Transaction

question 71

Multiple Choice

The use of a letter of credit in a transaction for the international sale of goods greatly reduces costs in the deal because the issuer

• A)must determine whether the contract conditions have been satisfied.
• B)does not inquire into whether the contract conditions have been met.
• C)pays only against the facts reflected in documents presented by the beneficiary.
• D)has the obligation to police the underlying contract.

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Definitions:

Carbon

A chemical element with symbol C, known as the basis of all life on Earth due to its ability to form a vast number of compounds.

Organic Substance

A compound containing carbon atoms, typically found in or produced by living organisms.

Glucose

A primary sweet substance important for the energy mechanisms in living beings and constituent of a variety of carbohydrate entities.

ATP

Adenosine triphosphate, a high-energy molecule found in the cells of the human body, serving as a primary energy carrier.