Detailed Answer
Answer (B) is correct. A letter of credit is a definite undertaking by an issuer (such as a bank) to a beneficiary (such as a seller) at the request or for the account of an applicant (such as a buyer who is a customer of the bank) to honor a documentary presentation by payment or delivery of an item of value. The holder of a letter of credit merely needs to present the required drafts or other documents (usually documenting a sale of goods to the issuer’s customer) and to receive payment from the bank or other issuer up to the limit specified.