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GCE Commerce 1989 Question 39

Question 39

Foreign Trade

Most payments in international trade are made by means of

  1. A.cash
  2. B.bills of lading
  3. C.personal cheques
  4. D.letters of credit
  5. E.travellers cheques.
Show the answer and explanation

Answer: D (letters of credit)

Explanation

A letter of credit from the importer's bank guarantees payment, so it is the usual method in international trade.