Multiple choice

CIF stands for cost, insurance and freight. The documents under CIF contract are generally delivered by the bank against (a) payment of the price & (b) against acceptance of a draft.

  1. True

  2. False

  3. Partly true

  4. Cannot say
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A Correct answer
Explanation

CIF (Cost, Insurance, Freight) is an international shipping term where the seller arranges insurance and freight to the destination port. Under CIF contracts, banks typically handle documents against payment (cash against documents) or against acceptance of a draft (documents against acceptance). This protects both buyer and seller by ensuring payment is secured before document transfer.

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