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Which of the following is NOT true regarding Letter of Credit?

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Which of the following is NOT true regarding Letter of Credit?
  • AIt is usually preferred when there is a high level of risk involved
  • BThere are two types of LoC: Revocable and Irrevocable
  • CLoC are chargeable by bank
  • DIt can be issued by only banks
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A Letter of Credit is a written commitment issued by the bank or some other financial institutions for payment assurance to the seller party from the buyer’s request. This is a facility provided by the bank for which it charges fees from the beneficiary. LoC is used when there is a high level of risk involves a business transaction.