Question 1

Countertrade represents foreign trade:

Accepted Answer

A)  restrictions imposed by the government on imports from another country. 
B)  restrictions imposed by the government on exports sent from the country. 
C)  transactions that force the sales of goods of one country to be linked to the purchase or exchange of goods from the country. 
D)  financing provided to an exporter in exchange for goods provided to the creditor by the exporter. 
A)  restrictions imposed by the government on imports from another country. 
B)  restrictions imposed by the government on exports sent from the country. 
C)  transactions that force the sales of goods of one country to be linked to the purchase or exchange of goods from the country. 
D)  financing provided to an exporter in exchange for goods provided to the creditor by the exporter. C

Question 2

A bill of exchange requesting the bank to pay the face amount upon presentation of documents is a:

Accepted Answer

A)  banker's acceptance. 
B)  time draft. 
C)  letter of credit. 
D)  sight draft. 
A)  banker's acceptance. 
B)  time draft. 
C)  letter of credit. 
D)  sight draft. D

Question 3

A(n)___________ is an unconditional promise drawn by one party,instructing the buyer to pay the face amount upon presentation.

Accepted Answer

A)  draft 
B)  bill of lading 
C)  trade acceptance 
D)  letter of credit 
A)  draft 
B)  bill of lading 
C)  trade acceptance 
D)  letter of credit A

Question 4

Under a letter of credit arrangement,the bank issuing the letter of credit is known as the ________ bank,the correspondent bank in the beneficiary's country to which the issuing bank sends the letter of credit is known as the _______ bank,and the bank that agrees to examine documents under the letter of credit and pay the beneficiary is called the ________ bank.

Accepted Answer

A)  issuing;negotiating;advising 
B)  issuing;advising;negotiating 
C)  advising;issuing;negotiating 
D)  negotiating;issuing;advising 
E)  advising;negotiating;issuing 
A)  issuing;negotiating;advising 
B)  issuing;advising;negotiating 
C)  advising;issuing;negotiating 
D)  negotiating;issuing;advising 
E)  advising;negotiating;issuing

Question 5

Which of the following payment terms provides the supplier with the greatest degree of protection

Accepted Answer

A)  letters of credit. 
B)  consignment. 
C)  prepayment. 
D)  drafts (sight/time). 
A)  letters of credit. 
B)  consignment. 
C)  prepayment. 
D)  drafts (sight/time).

Question 6

When using factoring to finance international trade,a bank will provide a loan to the exporter secured by an assignment of the account receivable.

Accepted Answer

A) True 
 B)False

Question 7

There is an active secondary market for banker's acceptances.

Accepted Answer

A) True 
 B)False

Question 8

Under a _____________ arrangement,the exporter ships the goods to the importer while still retaining actual title to the merchandise.

Accepted Answer

A)  draft 
B)  consignment 
C)  prepayment 
D)  open account 
A)  draft 
B)  consignment 
C)  prepayment 
D)  open account

Question 9

Which of the following is not true regarding a banker's acceptance

Accepted Answer

A)  It can be beneficial to the exporter, as he does not have to worry about the credit risk of the importer. 
B)  It can be beneficial to the importer, as he may have greater access to foreign markets when purchasing supplies. 
C)  It can be beneficial to the bank accepting the draft in that it earns a commission for creating an acceptance. 
D)  It is a sight draft. 
E)  All of the above are true. 
A)  It can be beneficial to the exporter, as he does not have to worry about the credit risk of the importer. 
B)  It can be beneficial to the importer, as he may have greater access to foreign markets when purchasing supplies. 
C)  It can be beneficial to the bank accepting the draft in that it earns a commission for creating an acceptance. 
D)  It is a sight draft. 
E)  All of the above are true.

Question 10

The Working Capital Guarantee Program is administered by the:

Accepted Answer

A)  Private Export Funding Corporation (PEFCO). 
B)  Overseas Private Investment Corporation (OPI
C) . 
C)  Ex-Imbank. 
D)  Foreign Credit Insurance Association (FCI
A) . 
A)  Private Export Funding Corporation (PEFCO). 
B)  Overseas Private Investment Corporation (OPI
C) . 
C)  Ex-Imbank. 
D)  Foreign Credit Insurance Association (FCI
A) .

Question 11

The exchange of goods between two parties without the use of any currency as a medium of exchange is called factoring.

Accepted Answer

A) True 
 B)False

Question 12

The term counterpurchase denotes the exchange of goods between two parties under two distinct contracts expressed in monetary terms.

Accepted Answer

A) True 
 B)False

Question 13

Under a letter of credit,the exporter will not ship the goods until the buyer has remitted payment to the exporter.

Accepted Answer

A) True 
 B)False

Question 14

The Working Capital Guarantee Program and the Medium-term Guarantee Program are offered by the:

Accepted Answer

A)  Export-Import Bank of the United States 
B)  Private Export Funding Corporation 
C)  Overseas Private Investment Corporation 
D)  none of the above 
A)  Export-Import Bank of the United States 
B)  Private Export Funding Corporation 
C)  Overseas Private Investment Corporation 
D)  none of the above

Question 15

___________ is not a type of program offered by Ex-Imbank.

Accepted Answer

A)  Guarantees 
B)  Loans 
C)  Currency swap insurance 
D)  Bank insurance 
A)  Guarantees 
B)  Loans 
C)  Currency swap insurance 
D)  Bank insurance

Question 16

The interest rate the bank charges the customer in a banker's acceptance is referred to as the all-in rate;it entirely consists of the acceptance commission.

Accepted Answer

A) True 
 B)False

Question 17

Under a countertrade arrangement,the exporter ships the goods to the importer while retaining title to the merchandise until it is sold.

Accepted Answer

A) True 
 B)False

Question 18

Consider an exporter that is willing to send goods to the importer without a guaranteed payment by the bank.  The bank provides a loan to the exporter that is backed by the value of the exported goods.  This reflects:

Accepted Answer

A)  accounts receivable financing. 
B)  forfaiting. 
C)  factoring. 
D)  a letter of credit. 
A)  accounts receivable financing. 
B)  forfaiting. 
C)  factoring. 
D)  a letter of credit.

Question 19

__________ was established in 1934 with the intention to facilitate SovietAmerican trade.

Accepted Answer

A)  Domestic International Sales Corporation (DIS
C)  
B)  Private Export Funding Corporation (PEFCO) 
C)  Export Import Bank 
D)  Foreign Credit Insurance Association (FCI
A)  
A)  Domestic International Sales Corporation (DIS
C)  
B)  Private Export Funding Corporation (PEFCO) 
C)  Export Import Bank 
D)  Foreign Credit Insurance Association (FCI
A)

Question 20

Which of the following is not a payment method used for international trade

Accepted Answer

A)  consignment. 
B)  open account. 
C)  factoring. 
D)  draft. 
E)  letter of credit. 
A)  consignment. 
B)  open account. 
C)  factoring. 
D)  draft. 
E)  letter of credit.

Countertrade represents foreign trade:

A bill of exchange requesting the bank to pay the face amount upon presentation of documents is a:

A(n)___________ is an unconditional promise drawn by one party,instructing the buyer to pay the face amount upon presentation.

Which of the following payment terms provides the supplier with the greatest degree of protection

When using factoring to finance international trade,a bank will provide a loan to the exporter secured by an assignment of the account receivable.

There is an active secondary market for banker's acceptances.

Under a _____________ arrangement,the exporter ships the goods to the importer while still retaining actual title to the merchandise.

Which of the following is not true regarding a banker's acceptance

The Working Capital Guarantee Program is administered by the:

The exchange of goods between two parties without the use of any currency as a medium of exchange is called factoring.

The term counterpurchase denotes the exchange of goods between two parties under two distinct contracts expressed in monetary terms.

Under a letter of credit,the exporter will not ship the goods until the buyer has remitted payment to the exporter.

The Working Capital Guarantee Program and the Medium-term Guarantee Program are offered by the:

___________ is not a type of program offered by Ex-Imbank.

The interest rate the bank charges the customer in a banker's acceptance is referred to as the all-in rate;it entirely consists of the acceptance commission.

Under a countertrade arrangement,the exporter ships the goods to the importer while retaining title to the merchandise until it is sold.

Consider an exporter that is willing to send goods to the importer without a guaranteed payment by the bank. The bank provides a loan to the exporter that is backed by the value of the exported goods. This reflects:

__________ was established in 1934 with the intention to facilitate SovietAmerican trade.

Which of the following is not a payment method used for international trade

Multinational Financial Management: An Overview

International Flow of Funds

International Financial Markets

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships among Inflation,Interest Rates,and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

Multinational Restructuring

Country Risk Analysis

Multinational Cost of Capital and Capital Structure

Long-Term Financing

Short-Term Financing

International Cash Management

Filters

Exam 19: Financing International Trade

Countertrade represents foreign trade:

A bill of exchange requesting the bank to pay the face amount upon presentation of documents is a:

A(n)___________ is an unconditional promise drawn by one party,instructing the buyer to pay the face amount upon presentation.

Which of the following payment terms provides the supplier with the greatest degree of protection

When using factoring to finance international trade,a bank will provide a loan to the exporter secured by an assignment of the account receivable.

There is an active secondary market for banker's acceptances.

Under a _____________ arrangement,the exporter ships the goods to the importer while still retaining actual title to the merchandise.

Which of the following is not true regarding a banker's acceptance

The Working Capital Guarantee Program is administered by the:

The exchange of goods between two parties without the use of any currency as a medium of exchange is called factoring.

The term counterpurchase denotes the exchange of goods between two parties under two distinct contracts expressed in monetary terms.

Under a letter of credit,the exporter will not ship the goods until the buyer has remitted payment to the exporter.

The Working Capital Guarantee Program and the Medium-term Guarantee Program are offered by the:

___________ is not a type of program offered by Ex-Imbank.

The interest rate the bank charges the customer in a banker's acceptance is referred to as the all-in rate;it entirely consists of the acceptance commission.

Under a countertrade arrangement,the exporter ships the goods to the importer while retaining title to the merchandise until it is sold.

Consider an exporter that is willing to send goods to the importer without a guaranteed payment by the bank. The bank provides a loan to the exporter that is backed by the value of the exported goods. This reflects:

__________ was established in 1934 with the intention to facilitate SovietAmerican trade.

Which of the following is not a payment method used for international trade

Multinational Financial Management: An Overview

International Flow of Funds

International Financial Markets

Exchange Rate Determination

Currency Derivatives

Government Influence on Exchange Rates

International Arbitrage and Interest Rate Parity

Relationships among Inflation,Interest Rates,and Exchange Rates

Forecasting Exchange Rates

Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Multinational Capital Budgeting

Multinational Restructuring

Country Risk Analysis

Multinational Cost of Capital and Capital Structure

Long-Term Financing

Short-Term Financing

International Cash Management

Filters