MP Board · Class 11 · Business Studies · International BusinessWhich institution provides a guarantee of payment to the exporter on behalf of the importer?
Step-by-Step Solution
A Letter of Credit is a guarantee issued by the importer's bank stating that the bank will honor the payment to the exporter up to a certain amount, provided the specified shipping documents are submitted within the stipulated time.
Detailed Options Breakdown
Option : World Bank
Incorrect choice. This distractor represents a common misunderstanding of the core principles of International Business.
Option 1: Letter of Credit issuing bank (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 2: Insurance Company
Incorrect choice. This distractor represents a common misunderstanding of the core principles of International Business.
Option 3: Customs Authority
Incorrect choice. This distractor represents a common misunderstanding of the core principles of International Business.
💡 Study Guide: This question tests core syllabus concepts from International Business. For formulas, key summaries, and mock exam reference guides, read the full International Business Revision Notes.