Which of the following is true of a letter of credit in international

QUESTION

Which of the following is true of a letter of credit in international trade?

A. No cash deposit or collateral is required from the importer.

B. The exporter pays the trusted third party (usually a bank) a fee for the service.

C. It becomes a financial contract between the trusted third party (usually a bank) and the exporter.

D. It is issued by the exporter at the request of the importer.

E. The creditworthiness of the importer is irrelevant when issuing a letter of credit.

ANSWER

C