Exam 19: Financing International Trade

Which of the following would be included in a commercial invoice?

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.

Under a letter of credit (L/C) arrangement, the ______issues the L/C and sends it to the ____ .

The risk to the exporter is highest with the ____ payment method.

The all-in rate a bank charges for a banker's acceptance includes both the interest rate and the acceptance commission.

____ is(are) not a type of program offered by the Ex-Im Bank.

The commission earned by the bank for creating a banker's acceptance is reflected in the all-in rate.

With ____, the importer's bank promises to pay the exporter if the importer fails to pay as agreed.

The ____ is a private corporation owned by a consortium of commercial banks and industrial companies, but the ____ is a self-sustaining government agency.

The time period of most time drafts ranges from

Consider a bank that acknowledges that it will make payment on behalf of a computer importer aFter the bank receives documents showing that the computers have been shipped to the importer. This reflects:

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

Who is obligated to make payment once proof of shipment of goods is documented in a letter of credit?

In a countertrade transaction, banks on both ends act as intermediaries in the processing of shipping documents and the collection of payment.

Under prepayment, the exporter will not ship the products until the exporter has received payment from the importer.

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

When an exporter sells an account receivable to a factor, the factor will attempt to collect payment from the importer, but if the importer is unable to pay, the factor can collect the payment from the exporter.

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

A time draft that is issued by a firm and guaranteed by a bank is called a banker's acceptance.

____ refers to the purchase of financial obligations, such as bills of exchange or promissory notes, from the original holder, usually the exporter; the obligations are sold "without recourse," meaning that if the importer does not pay, the exporter has no responsibility for their payment.