Q.A negotiable instrument drawn by an exporter, directing the importer to pay a certain sum of money for goods exported, is called a:
(A) Bill of Exchange
(B) Letter of Credit
(C) Depository Receipt
(D) International Bond

The question specifies that the exporter itself draws up the instrument directing payment -- this identifies the instrument by who creates it, which is the key detail to focus on.

A Bill of Exchange is a negotiable instrument that the exporter draws up, directing the importer (or the importer's bank) to pay a stated sum of money, either immediately on presentation or on a fixed future date, for goods that have been exported. Working through the options: (A) matches the description exactly -- an instrument drawn by the exporter directing payment -- so it is the correct option. (B) a Letter of Credit is issued by the importer's bank, not drawn by the exporter, and it is a guarantee of payment rather than a direct payment instruction, so it is incorrect. (C) a Depository Receipt (GDR/ADR) is a certificate representing company shares traded on a foreign stock exchange, entirely unconnected to coll …

A common slip is to answer 'Letter of Credit' here because both instruments are studied together; remember the direction of creation -- the importer's bank issues the …