A(n)_____ Is a Document Issued by a Bank That Guarantees

question 43

Multiple Choice

A(n) _____ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms.

• A)documentary draft
• B)letter of credit
• C)import document
• D)freight document

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Definitions:

Discount Rate

The interest rate used to determine the present value of future cash flows, reflecting the time value of money and risk of cash flows.

Annuity

A financial instrument that provides a steady flow of payments to a person, often employed as a source of income for those in retirement.

Present Value

The present-day valuation of a money amount expected in the future or series of cash inflows, factoring in a specific return rate.

Interest Rate

The percentage charged on the total amount you borrow or save, often annually.