Question 1

A document given by a transportation company that lists goods to be transported and terms of the shipping agreement.

Accepted Answer

A)  Order bill of lading 
B)  Bill of shipping 
C)  Bill of ordering 
D)  Shipping bill 
A)  Order bill of lading 
B)  Bill of shipping 
C)  Bill of ordering 
D)  Shipping bill

Question 2

The spot exchange rate is the rate being quoted for delivery of the currency at a particular spot in the future.

Accepted Answer

A) True 
 B)False

Question 3

A trust receipt as used in financing international transactions

Accepted Answer

A)  is issued by bonded warehouses for merchandise stored therein. 
B)  allows the release of merchandise on a consignment basis by the bank that issued the letter of credit. 
C)  is evidence of ownership of funds held in escrow by the importer's bank. 
D)  is a negotiable instrument that trades freely in the money market. 
A)  is issued by bonded warehouses for merchandise stored therein. 
B)  allows the release of merchandise on a consignment basis by the bank that issued the letter of credit. 
C)  is evidence of ownership of funds held in escrow by the importer's bank. 
D)  is a negotiable instrument that trades freely in the money market.

Question 4

The traveler's letter of credit is usually used by

Accepted Answer

A)  purchasing agents making purchases in foreign countries. 
B)  individuals traveling abroad. 
C)  importers' banks. 
D)  correspondent banks, in order to reduce shipment of gold between countries. 
A)  purchasing agents making purchases in foreign countries. 
B)  individuals traveling abroad. 
C)  importers' banks. 
D)  correspondent banks, in order to reduce shipment of gold between countries.

Question 5

A trust receipt is an instrument through which a bank retains title to goods until they are paid for.

Accepted Answer

A) True 
 B)False

Question 6

Should a business fail after receiving shipping documents from its bank on the basis of a trust receipt, the bank

Accepted Answer

A)  becomes a preferred creditor to the extent of the amount due less cash deposits with the bank. 
B)  repossesses the merchandise on the basis of a specific lien thereon. 
C)  repossesses the merchandise on the basis of its holding of title to the merchandise. 
D)  has a prior claim relative to other general creditors. 
A)  becomes a preferred creditor to the extent of the amount due less cash deposits with the bank. 
B)  repossesses the merchandise on the basis of a specific lien thereon. 
C)  repossesses the merchandise on the basis of its holding of title to the merchandise. 
D)  has a prior claim relative to other general creditors.

Question 7

International financial markets strongly influence domestic interest rates.

Accepted Answer

A) True 
 B)False

Question 8

A documentary draft is a draft that is accompanied by an order bill of lading and other documents.

Accepted Answer

A) True 
 B)False

Question 9

In recent years, the principal market for bankers' acceptances has been

Accepted Answer

A)  domestic banks. 
B)  domestic and foreign business corporations. 
C)  foreign banks. 
D)  none of the above. 
A)  domestic banks. 
B)  domestic and foreign business corporations. 
C)  foreign banks. 
D)  none of the above.

Question 10

An expected decline in a country's currency may lead to an attempt to accelerate collection of accounts receivable from that country for transfer to another country with a more stable currency.

Accepted Answer

A) True 
 B)False

Question 11

A purchasing agent for a domestic art gallery touring foreign countries for possible acquisitions might find it convenient to have

Accepted Answer

A)  travelers' checks. 
B)  a commercial letter of credit. 
C)  regular checkbook drafts. 
D)  a traveler's letter of credit. 
A)  travelers' checks. 
B)  a commercial letter of credit. 
C)  regular checkbook drafts. 
D)  a traveler's letter of credit.

Question 12

An indirect exchange rate quotation is simply the reciprocal of a direct exchange rate quotation.

Accepted Answer

A) True 
 B)False

Question 13

The United Nations operates a world central bank that provides a world monetary unit to accommodate commerce across national boundaries.

Accepted Answer

A) True 
 B)False

Question 14

The International Bank for Reconstruction and Development (World Bank) was created to provide banking services for U.S. firms operating overseas.

Accepted Answer

A) True 
 B)False

Question 15

A documentary draft is accompanied, among other things, by a(n)

Accepted Answer

A)  order bill of lading. 
B)  manifest. 
C)  trust receipt. 
D)  letter of credit. 
A)  order bill of lading. 
B)  manifest. 
C)  trust receipt. 
D)  letter of credit.

Question 16

Economic risk is the risk associated with the possibility that a national government might confiscate or expropriate assets held by foreigners.

Accepted Answer

A) True 
 B)False

Question 17

An instrument requiring immediate payment is classified as a time draft.

Accepted Answer

A) True 
 B)False

Question 18

Loans by an exporter's bank based on the security of a documentary draft

Accepted Answer

A)  are supported entirely by the strength of the importer. 
B)  are subject to the approval of the importer's bank. 
C)  are available only to exporters with strong credit ratings. 
D)  have not only the financial strength of the exporter to support them, but also that of the importer. 
A)  are supported entirely by the strength of the importer. 
B)  are subject to the approval of the importer's bank. 
C)  are available only to exporters with strong credit ratings. 
D)  have not only the financial strength of the exporter to support them, but also that of the importer.

Question 19

A draft that is accompanied by an order bill of lading and other documents is called a(n)

Accepted Answer

A)  bill of exchange. 
B)  sight draft. 
C)  time draft. 
D)  documentary draft. 
A)  bill of exchange. 
B)  sight draft. 
C)  time draft. 
D)  documentary draft.

Question 20

The attitude of central banks and commercial banks toward bankers' acceptances

Accepted Answer

A)  has been favorable regarding bankers' acceptances as attractive short-term commitments. 
B)  has never been constructive and has, in fact, been in opposition to their use at times. 
C)  is one of approval provided that before investing in such instruments guarantees can be obtained from the Export-Import Bank. 
D)  is irrelevant, since they are prevented from investing in such instruments by regulations or laws. 
A)  has been favorable regarding bankers' acceptances as attractive short-term commitments. 
B)  has never been constructive and has, in fact, been in opposition to their use at times. 
C)  is one of approval provided that before investing in such instruments guarantees can be obtained from the Export-Import Bank. 
D)  is irrelevant, since they are prevented from investing in such instruments by regulations or laws.

A document given by a transportation company that lists goods to be transported and terms of the shipping agreement.

The spot exchange rate is the rate being quoted for delivery of the currency at a particular spot in the future.

A trust receipt as used in financing international transactions

The traveler's letter of credit is usually used by

A trust receipt is an instrument through which a bank retains title to goods until they are paid for.

Should a business fail after receiving shipping documents from its bank on the basis of a trust receipt, the bank

International financial markets strongly influence domestic interest rates.

A documentary draft is a draft that is accompanied by an order bill of lading and other documents.

In recent years, the principal market for bankers' acceptances has been

An expected decline in a country's currency may lead to an attempt to accelerate collection of accounts receivable from that country for transfer to another country with a more stable currency.

A purchasing agent for a domestic art gallery touring foreign countries for possible acquisitions might find it convenient to have

An indirect exchange rate quotation is simply the reciprocal of a direct exchange rate quotation.

The United Nations operates a world central bank that provides a world monetary unit to accommodate commerce across national boundaries.

The International Bank for Reconstruction and Development (World Bank) was created to provide banking services for U.S. firms operating overseas.

A documentary draft is accompanied, among other things, by a(n)

Economic risk is the risk associated with the possibility that a national government might confiscate or expropriate assets held by foreigners.

An instrument requiring immediate payment is classified as a time draft.

Loans by an exporter's bank based on the security of a documentary draft

A draft that is accompanied by an order bill of lading and other documents is called a(n)

The attitude of central banks and commercial banks toward bankers' acceptances

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 6: International Finance and Trade

A document given by a transportation company that lists goods to be transported and terms of the shipping agreement.

The spot exchange rate is the rate being quoted for delivery of the currency at a particular spot in the future.

A trust receipt as used in financing international transactions

The traveler's letter of credit is usually used by

A trust receipt is an instrument through which a bank retains title to goods until they are paid for.

Should a business fail after receiving shipping documents from its bank on the basis of a trust receipt, the bank

International financial markets strongly influence domestic interest rates.

A documentary draft is a draft that is accompanied by an order bill of lading and other documents.

In recent years, the principal market for bankers' acceptances has been

An expected decline in a country's currency may lead to an attempt to accelerate collection of accounts receivable from that country for transfer to another country with a more stable currency.

A purchasing agent for a domestic art gallery touring foreign countries for possible acquisitions might find it convenient to have

An indirect exchange rate quotation is simply the reciprocal of a direct exchange rate quotation.

The United Nations operates a world central bank that provides a world monetary unit to accommodate commerce across national boundaries.

The International Bank for Reconstruction and Development (World Bank) was created to provide banking services for U.S. firms operating overseas.

A documentary draft is accompanied, among other things, by a(n)

Economic risk is the risk associated with the possibility that a national government might confiscate or expropriate assets held by foreigners.

An instrument requiring immediate payment is classified as a time draft.

Loans by an exporter's bank based on the security of a documentary draft

A draft that is accompanied by an order bill of lading and other documents is called a(n)

The attitude of central banks and commercial banks toward bankers' acceptances

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters