WHY LETTERS OF CREDIT ARE FORMALLY CALLED “DOCUMENTARY CREDITS”

23. Why letters of credit are formally called “documentary credits”?

A. Because a letter of credit is a binding agreement by a bank to pay a certain sum of

money when the exporter presents the necessary documents to the bank.

B. Because a letter of credit is issued by an issuing bank at the request of the buyer

C. Because in a letter of credit situation, documents are exchanged for money

D. Because the documents in a letter of credit are proofs of trust.