Question 1

Forfaiting,in which a bank purchases at a discount from an importer a series of promissory notes in favor of an exporter,

Accepted Answer

A) is a short-term form of trade financing. 
B) is a medium-term form of trade financing. 
C) is a long-term form of trade financing. 
D) none of the above 
A) is a short-term form of trade financing. 
B) is a medium-term form of trade financing. 
C) is a long-term form of trade financing. 
D) none of the above B

Question 2

The ________'s bank sends the letter of credit to the ________'s bank.After sending the merchandise,the ________ gives the shipping documents and time draft to his bank.

Accepted Answer

A) importer, exporter, exporter 
B) exporter, importer, importer 
C) importer, exporter, importer 
D) exporter, importer, exporter 
A) importer, exporter, exporter 
B) exporter, importer, importer 
C) importer, exporter, importer 
D) exporter, importer, exporter A

Question 3

Conducting international trade transactions is difficult in comparison to domestic trades.Which of the following are false statements regarding this reality?

Accepted Answer

A) Commercial and political risks enter into the equation, which are not factors in domestic trade. 
B) It is important for a country to be competitively strong in international trade in order for its citizens to have the goods and services they need and demand. 
C) It is generally the case that the costs of international trade outweigh the benefits. 
D) All of the above are true statements 
A) Commercial and political risks enter into the equation, which are not factors in domestic trade. 
B) It is important for a country to be competitively strong in international trade in order for its citizens to have the goods and services they need and demand. 
C) It is generally the case that the costs of international trade outweigh the benefits. 
D) All of the above are true statements C

Question 4

The term "countertrade" refers to

Accepted Answer

A) many different types of transactions in which the seller provides a buyer with goods or services and promises in return to purchase goods or services from the buyer. 
B) barter, clearing arrangement, and switch trading. 
C) buy-back, counter purchase, and offset. 
D) all of the above 
A) many different types of transactions in which the seller provides a buyer with goods or services and promises in return to purchase goods or services from the buyer. 
B) barter, clearing arrangement, and switch trading. 
C) buy-back, counter purchase, and offset. 
D) all of the above

Question 5

The time from acceptance to maturity on a $1,000,000 banker's acceptance is 90 days.
The importing bank's acceptance commission is 3½ percent and that the market rate for 90-day B/As is 5 percent.
-Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

Accepted Answer

If the exporter holds the B/A to maturit

Question 6

The time from acceptance to maturity on a $30,000,000 banker's acceptance is 45 days.
The importing bank's acceptance commission is 1.5 percent and that the market rate for 45-day B/As is 4½ percent.
-Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

Accepted Answer

If the exporter holds the B/A to maturit

Question 7

A bill of lading

Accepted Answer

A) is a document issued by the common carrier specifying that it has received the foods for shipment; it can serve as title to the goods. 
B) later becomes a banker's acceptance. 
C) is a time draft that calls for payment upon physical delivery of goods. 
D) none of the above 
A) is a document issued by the common carrier specifying that it has received the foods for shipment; it can serve as title to the goods. 
B) later becomes a banker's acceptance. 
C) is a time draft that calls for payment upon physical delivery of goods. 
D) none of the above

Question 8

Assume the time from acceptance to maturity on a $1,000,000 banker's acceptance is 180 days.Further assume that the importing bank's acceptance commission is 1.25 percent and that the market rate for 180-day B/As is 5.0 percent.Calculate the amount the exporter will receive if he holds it to maturity.

Accepted Answer

A) $906,250 
B) $909,375 
C) $968,750 
D) $993,750 
A) $906,250 
B) $909,375 
C) $968,750 
D) $993,750

Question 9

Banker's Acceptances usually have maturities ranging from

Accepted Answer

A) 30 to 180 days. 
B) 90 to 360 days. 
C) 1 year to 5 years. 
D) over 5 years. 
A) 30 to 180 days. 
B) 90 to 360 days. 
C) 1 year to 5 years. 
D) over 5 years.

Question 10

International trade is more difficult and risky from the exporter's perspective than is domestic trade because

Accepted Answer

A) the exporter may not be familiar with the buyer, and thus not know if the importer is a good credit risk. 
B) if the merchandise is exported abroad and the buyer does not pay, it may prove difficult, if not impossible, for the exporter to have any legal recourse. 
C) political instability makes it risky to ship merchandise abroad certain to parts of the world. 
D) all of the above 
A) the exporter may not be familiar with the buyer, and thus not know if the importer is a good credit risk. 
B) if the merchandise is exported abroad and the buyer does not pay, it may prove difficult, if not impossible, for the exporter to have any legal recourse. 
C) political instability makes it risky to ship merchandise abroad certain to parts of the world. 
D) all of the above

Question 11

Assume the time from acceptance to maturity on a $5,000,000 banker's acceptance is 90 days.Further assume that the importing bank's acceptance commission is 1.5 percent and that the market rate for 90-day B/As is 6.0 percent.Calculate the amount the exporter will receive if he discounts the B/A with the importer's bank.

Accepted Answer

A) $4,981,750 
B) $4,906,250 
C) $4,009,375 
D) none of the above 
A) $4,981,750 
B) $4,906,250 
C) $4,009,375 
D) none of the above

Question 12

The time from acceptance to maturity on a $300,000 banker's acceptance is 30 days.
The importing bank's acceptance commission is 3 percent and that the market rate for 30-day B/As is 4 percent.
-If the exporter's opportunity cost of capital is 11 percent,should he discount the B/A or hold it to maturity?

Accepted Answer

If his cost of funds > 4.07% compounded

Question 13

The ________ sends a purchase order to the ________. The ________ applies to his bank for a letter of credit.

Accepted Answer

A) importer, exporter, exporter 
B) exporter, importer, importer 
C) importer, exporter, importer 
D) exporter, importer, exporter 
A) importer, exporter, exporter 
B) exporter, importer, importer 
C) importer, exporter, importer 
D) exporter, importer, exporter

Question 14

The time from acceptance to maturity on a $50,000 banker's acceptance is 180 days.
The importing bank's acceptance commission is 2.50 percent and that the market rate for 180-day B/As is 2 percent.
-Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

Accepted Answer

The answer of The time from acceptance to maturity on...

Question 15

In a forfaiting transaction,the forfait

Accepted Answer

A) buys the notes at a discount from face value from the importer. 
B) buys the notes at a discount from face value from the exporter. 
C) redeems the notes at a face value to the exporter. 
D) none of the above 
A) buys the notes at a discount from face value from the importer. 
B) buys the notes at a discount from face value from the exporter. 
C) redeems the notes at a face value to the exporter. 
D) none of the above

Question 16

The time from acceptance to maturity on a $1,000,000 banker's acceptance is 90 days.
The importing bank's acceptance commission is 3½ percent and that the market rate for 90-day B/As is 5 percent.
-Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

Accepted Answer

The answer of The time from acceptance to maturity on...

Question 17

The time from acceptance to maturity on a $50,000 banker's acceptance is 180 days.
The importing bank's acceptance commission is 2.50 percent and that the market rate for 180-day B/As is 2 percent.
-If the exporter's opportunity cost of capital is 11 percent,should he discount the B/A or hold it to maturity?

Accepted Answer

If his cost of funds > 2.05% compounded

Question 18

The time from acceptance to maturity on a $30,000,000 banker's acceptance is 45 days.
The importing bank's acceptance commission is 1.5 percent and that the market rate for 45-day B/As is 4½ percent.
-Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

Accepted Answer

The answer of The time from acceptance to maturity on...

Question 19

The time from acceptance to maturity on a $50,000 banker's acceptance is 180 days.
The importing bank's acceptance commission is 2.50 percent and that the market rate for 180-day B/As is 2 percent.
-Determine the amount the exporter will receive if he holds the B/A until maturity.

Accepted Answer

The answer of The time from acceptance to maturity on...

Question 20

A clearing arrangement

Accepted Answer

A) is also called a bilateral clearing agreement. 
B) is a form of barter. 
C) involves two parties agreeing to buy a specified amount of goods or services from one another. 
D) all of the above 
A) is also called a bilateral clearing agreement. 
B) is a form of barter. 
C) involves two parties agreeing to buy a specified amount of goods or services from one another. 
D) all of the above

Forfaiting,in which a bank purchases at a discount from an importer a series of promissory notes in favor of an exporter,

The 's bank sends the letter of credit to the 's bank.After sending the merchandise,the gives the shipping documents and time draft to his bank.

Conducting international trade transactions is difficult in comparison to domestic trades.Which of the following are false statements regarding this reality?

The term "countertrade" refers to

A bill of lading

Banker's Acceptances usually have maturities ranging from

International trade is more difficult and risky from the exporter's perspective than is domestic trade because

The sends a purchase order to the . The applies to his bank for a letter of credit.

In a forfaiting transaction,the forfait

The time from acceptance to maturity on a $1,000,000 banker's acceptance is 90 days. The importing bank's acceptance commission is 3½ percent and that the market rate for 90-day B/As is 5 percent. -Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

The time from acceptance to maturity on a $50,000 banker's acceptance is 180 days. The importing bank's acceptance commission is 2.50 percent and that the market rate for 180-day B/As is 2 percent. -Determine the amount the exporter will receive if he holds the B/A until maturity.

A clearing arrangement

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Tax Environment and Transfer Pricing

Filters

Exam 20: International Trade Finance

Forfaiting,in which a bank purchases at a discount from an importer a series of promissory notes in favor of an exporter,

The ________'s bank sends the letter of credit to the ________'s bank.After sending the merchandise,the ________ gives the shipping documents and time draft to his bank.

Conducting international trade transactions is difficult in comparison to domestic trades.Which of the following are false statements regarding this reality?

The term "countertrade" refers to

A bill of lading

Banker's Acceptances usually have maturities ranging from

International trade is more difficult and risky from the exporter's perspective than is domestic trade because

The ________ sends a purchase order to the ________. The ________ applies to his bank for a letter of credit.

In a forfaiting transaction,the forfait

The time from acceptance to maturity on a $1,000,000 banker's acceptance is 90 days. The importing bank's acceptance commission is 3½ percent and that the market rate for 90-day B/As is 5 percent. -Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

The time from acceptance to maturity on a $50,000 banker's acceptance is 180 days. The importing bank's acceptance commission is 2.50 percent and that the market rate for 180-day B/As is 2 percent. -Determine the amount the exporter will receive if he holds the B/A until maturity.

A clearing arrangement

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

International Portfolio Investment

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Tax Environment and Transfer Pricing

Filters

The 's bank sends the letter of credit to the 's bank.After sending the merchandise,the gives the shipping documents and time draft to his bank.

The sends a purchase order to the . The applies to his bank for a letter of credit.