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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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