A Contingent Promise by a Bank to Pay a Bill

question 36

Multiple Choice

A contingent promise by a bank to pay a bill when it comes due if the bill's originator fails to pay is an example of a

• A)swap agreement.
• B)standby letters of credit.
• C)forward contract.
• D)loan commitment.
• E)commitment to buy foreign exchange.

---

Definitions:

Ethylene Glycol

A colorless, odorless, syrupy liquid used as antifreeze in cooling and heating systems, and in the manufacture of polyester fibers.

Phosgene

A toxic chemical compound used as an industrial reagent and chemical weapon, with the formula COCl2.

Organic Compound

A compound primarily made of carbon atoms bonded to hydrogen, possibly along with oxygen, nitrogen, sulfur, phosphorus, and halogens.

Carbonated Beverages

Drinks that contain dissolved carbon dioxide gas, creating a fizzy or bubbly texture.