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WAEC Commerce 1995 Question 20

Question 20

Foreign Trade

The best method of making payment to an overseas supplier is by

  1. A.bankdraft
  2. B.bill of exchange
  3. C.travellers cheque
  4. D.letter of credit
  5. E.certified cheque
Show the answer and explanation

Answer: D (letter of credit)

Explanation

A letter of credit gives the overseas supplier a bank's guarantee of payment.