Documents used in foreign trade - SS1 Commerce Past Questions and Answers - page 1

Letter of Hypothecation

Travelers Cheque

Mail Transfer

Foreign Bill of Exchange

Telegraphic Transfer

A documentary credit, also known as a letter of credit, is a guarantee issued by a bank on behalf of a buyer that ensures payment will be made to the seller upon certain conditions being met. Essentially, the buyer's bank promises to pay the seller once they receive documentation that proves the goods or services have been delivered as agreed.

Travelers cheques are considered safer than carrying cash because they can be replaced if lost or stolen. They are a form of prepaid currency that can be exchanged for local currency at banks and other authorized locations, making them a convenient option for travelers.