Exam 19: Financing International Trade

_______________ promises to pay the beneficiary if they buyer fails to pay as agreed.

Consider an exporter that sells its accounts receivables off to another firm that becomes responsible for obtaining cash from the various importers.  This reflects:

The sale of accounts receivable to a third party for a discount is called factoring.

In _______,a bank arranges to fund a loan to pay the exporter instead of charging the importer's account immediately.

Under prepayment,the exporter will not ship the goods until the buyer has remitted payment to the exporter.

In ___________,the exporter sells accounts receivable without recourse.

The commission earned by the bank for accepting a draft is reflected in the all-in-rate.

Consider a bank that acknowledges that it will make payments on behalf of a beer importer after the beer is delivered to the importer.  This reflects:

With _______,the exporter ships the goods to the importer while still retaining actual title to the merchandise.

The Direct Loan Program is administered by the:

As part of Ex-Imbank's export credit insurance programs,a(an)____________ policy is generally issued to an administrator,such as a bank,trading company,insurance broker,or government agency,who then administers the policy for multiple exporters.

The risk to the exporter is highest with the __________ method.

All types of foreign trade transactions in which the sale of goods to one country is linked to the purchase or exchange of goods from that same country are called countertrade.

The objectives of the Export-Import Bank of the United States include the assumption of underlying credit risk and country risk to encourage private lenders to finance export trade and the provision of direct loans to foreign buyers when private lenders are unwilling to do so.

A banker's acceptance is a draft drawn on and accepted by a(an)__________.

Which of the following is a reason why commercial banks can facilitate international trade

The Overseas Private Investment Corporation (OPIC)is owned by a consortium of commercial banks and industrial companies;it cooperates closely with the Export-Import Bank.

A draft drawn on and accepted by a bank is called a banker's acceptance.

Which of the following is not true regarding letters of credit

A bill of exchange requesting the bank to pay the face amount at a future date is a: