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WAEC Commerce 1994 Question 9

Question 9

Foreign Trade

The most acceptance and convenient means of payment in foreign trade is

  1. A.letter of credit
  2. B.bank-draft
  3. C.telegraphic money order
  4. D.promissory note
  5. E.bill of exchange
Show the answer and explanation

Answer: A (letter of credit)

Explanation

With a letter of credit the importer's bank guarantees payment to the exporter, so it is widely accepted in foreign trade.