Explain the significance and use of letters of credit. What types of transactions are facilitated by their use?

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Explain the significance and use of letters of credit. What types of transactions are facilitated by their use? Gup, B. E., & Kolari, J. W. (2005). Commercial banking: The management of risk. J. Wiley Lecture Notes (n.d.). Chapter 14 (Off-Balance Sheet Activities). Please cite any outside sources used as well.

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