Commercial letter of credit are? customarily required by importers of their suppliers. negotiable in the money markets of major cities. customarily provided by banks to their customers to accommodate their import activities. ordinarily provided by issuing bank at no charge to customers.

Answered: Commercial letter of credit are?…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter19: Financing International Trade

Section: Chapter Questions

Problem 5BIC

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Question

Commercial letter of credit are?

		customarily required by importers of their suppliers.
		negotiable in the money markets of major cities.
		customarily provided by banks to their customers to accommodate their import activities.
		ordinarily provided by issuing bank at no charge to customers.

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Expert Solution

Step 1 General Introduction

A commercial letter of credit

A commercial letter of credit is written on behalf of the customer which ensures a supplier to a company gets paid for the goods and services it provides. Letter of credit has become a very important aspect of international trade due to the nature of international dealings.