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    Question

    What is the main function of an advising bank in a

    documentary credit transaction?
    A To approve the buyer’s creditworthiness Correct Answer Incorrect Answer
    B To issue the letter of credit to the seller Correct Answer Incorrect Answer
    C To verify the documents presented by the seller and make payment Correct Answer Incorrect Answer
    D To notify the seller of the letter of credit issued by the buyer’s bank Correct Answer Incorrect Answer
    E To handle the shipment of goods from the seller to the buyer Correct Answer Incorrect Answer

    Solution

    The advising bank does not provide payment or credit guarantees but acts as a liaison, notifying the seller of the letter of credit issued by the buyer's bank. It confirms the authenticity of the credit but does not engage in the actual payment process.

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