What is an instrument issued by banks, substituting the credit standing of the Bank for the credit standing of the importer (buyer) of goods?
a. letter of credit
b. promisary note
c. international ACH
d.draft
2006-07-26 08:48:05 · 6 answers · asked by Nice girl 3 in Business & Finance ➔ Credit
Definitely Letter of credit.
2006-07-26 13:27:13 · answer #1 · answered by treday25 5 · 2⤊ 0⤋
Half knowledge/half process of elimination. It's A--letter of credit. I believe a letter of credit is a guarantee made by a bank that the buyer is "good for" a certain amount.
A promisary note (promissory note) is basically a loan. An international ACH would be an electronic transaction. And a draft is basically a type of withdrawal.
2006-07-26 09:13:50 · answer #2 · answered by Rich B 3 · 0⤊ 0⤋
I did not do any research on this, however as an importer I have never heard the bank would substitute their credit for my own. At best, they will give me a letter of credit, which allows the company I am purchasing from, know that I have the money to purchase items or will be extended the credit to do so.
It sounds like you have the answer since you did a multiple choice, I would be very interested in knowing.
2006-07-26 08:56:23 · answer #3 · answered by batwanda 4 · 0⤊ 0⤋
batwana has a good point. The answer you are looking for is a: letter of credit. However you misstate the nature of a letter of credit. It is actually noting more than a statement that the bank has extended credit to the buyer.
2006-07-26 11:40:03 · answer #4 · answered by STEVEN F 7 · 0⤊ 0⤋
Letter of credit.
2006-07-26 09:11:18 · answer #5 · answered by Cão Bravo 3 · 0⤊ 0⤋
of the 4 listed its got to be a. letter of credit...a prommisory note is a promise to pay....an ach is an electronic payment and a draft is a check
2006-07-26 08:54:02 · answer #6 · answered by cookiesmom 7 · 0⤊ 0⤋