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    Question

    Which of the following statements regarding bank guarantees is true?

    A Bank guarantee is a financial instrument issued by a bank to ensure payment or performance obligations on behalf of a customer. Correct Answer Incorrect Answer
    B Bank guarantee is a loan provided by a bank to a customer at a specified interest rate. Correct Answer Incorrect Answer
    C Bank guarantee is a type of insurance product offered by banks to protect against financial losses. Correct Answer Incorrect Answer
    D Bank guarantee is a document issued by a bank to certify the creditworthiness of a customer. Correct Answer Incorrect Answer
    E Bank guarantee is a term used to describe the process of opening a new bank account. Correct Answer Incorrect Answer

    Solution

    Bank guarantee is a financial instrument issued by a bank to ensure payment or performance obligations on behalf of a customer. A bank guarantee is a contractual agreement between a bank (issuer) and a customer (beneficiary), where the bank undertakes the responsibility to make payment or perform obligations in case the customer fails to fulfill its contractual obligations.

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