Final answer:
A letter of credit offers the best assurance for a company that it will be paid for exported goods, as it is a guarantee from a creditworthy bank. It is widely used in international trade to provide security for both the exporter and the importer by ensuring that payment will be received if the terms are met.
Step-by-step explanation:
The best assurance a company has of being paid for exported goods is a letter of credit. A letter of credit is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. Letters of credit are vital in international transactions because they ensure that payment will be received. Using this tool, the bank guarantees payment to the seller on behalf of the buyer, so long as the terms specified in the letter of credit are met.
Unlike other options such as piggyback arrangements, swaps, in-house export organizations, or a certified check, a letter of credit provides a high level of security for both parties involved in the transaction. In scenarios like caravansaries, which were used historically along trade routes, letters of credit were a way to avoid carrying large sums of gold. This provided a safe and trusted method to facilitate trade by allowing sellers to rely on the credit of banks rather than the risky business of transporting physical wealth.