Question 1

A typical foreign trade transaction requires three basic documents

Accepted Answer

A) letter of credit, bill of lading, and shipping documents. 
B) time draft, banker's acceptance, and bill of lading. 
C) letter of credit, time draft, and bill of lading. 
D) letter of credit, banker's acceptance, and bill of lading. 
A) letter of credit, bill of lading, and shipping documents. 
B) time draft, banker's acceptance, and bill of lading. 
C) letter of credit, time draft, and bill of lading. 
D) letter of credit, banker's acceptance, and bill of lading.

Question 2

There are several types of countertrade transactions:

Accepted Answer

A) none of which involve the use of money. 
B) in each type, the seller provides the buyer with goods or services in return for a reciprocal promise from the seller to purchase goods or services from the buyer. 
C) in each type, the seller provides the buyer with goods or services in return for a reciprocal promise from the buyer to stand ready to sell goods or services to the buyer. 
D) none of the above 
A) none of which involve the use of money. 
B) in each type, the seller provides the buyer with goods or services in return for a reciprocal promise from the seller to purchase goods or services from the buyer. 
C) in each type, the seller provides the buyer with goods or services in return for a reciprocal promise from the buyer to stand ready to sell goods or services to the buyer. 
D) none of the above

Question 3

In a forfaiting transaction,the forfait is usually

Accepted Answer

A) the importer. 
B) the exporter. 
C) the bank. 
D) the title to the goods, or the bill of lading. 
A) the importer. 
B) the exporter. 
C) the bank. 
D) the title to the goods, or the bill of lading.

Question 4

Arguments in favor of countertrade include benefits such as

Accepted Answer

A) conservation of cash or hard currency. 
B) improvement of trade imbalances. 
C) maintenance of export prices. 
D) all of the above 
A) conservation of cash or hard currency. 
B) improvement of trade imbalances. 
C) maintenance of export prices. 
D) all of the above

Question 5

Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

Accepted Answer

The answer of Calculate the amount the banker will receive...

Question 6

An offset transaction

Accepted Answer

A) can be viewed as a counterpurchase trade agreement involving the aerospace/defense industry. 
B) involves a technology transfer via the sale of a manufacturing plant: as part of the terms, the seller of the plant agrees to purchase a certain portion of the plant output. 
C) is the purchase by a third party of one country's a clearing agreement balance for hard currency. 
D) none of the above 
A) can be viewed as a counterpurchase trade agreement involving the aerospace/defense industry. 
B) involves a technology transfer via the sale of a manufacturing plant: as part of the terms, the seller of the plant agrees to purchase a certain portion of the plant output. 
C) is the purchase by a third party of one country's a clearing agreement balance for hard currency. 
D) none of the above

Question 7

If the importing bank's acceptance commission is 1.25 percent,determine the amount the exporter will receive if he holds the B/A until maturity.

Accepted Answer

A) $2,945,625 
B) $2,990,625 
C) $2,906,250 
D) $3,009,375 
A) $2,945,625 
B) $2,990,625 
C) $2,906,250 
D) $3,009,375

Question 8

A switch trade

Accepted Answer

A) is the purchase by a third party of one country's a clearing agreement balance for hard currency. 
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 the purchase by a third party of one country's a clearing agreement balance for hard currency. 
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

Question 9

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.
-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 10

The time from acceptance to maturity on a $1,000,000 banker's acceptance is 60 days.
The importing bank's acceptance commission is 1.00 percent and that the market rate for 60-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 11

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 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 12

A buy-back transaction

Accepted Answer

A) can be viewed as direct foreign investment in the purchasing country. 
B) can be viewed as direct foreign investment in the exporting country. 
C) can be viewed as indirect foreign investment in the purchasing country. 
D) none of the above 
A) can be viewed as direct foreign investment in the purchasing country. 
B) can be viewed as direct foreign investment in the exporting country. 
C) can be viewed as indirect foreign investment in the purchasing country. 
D) none of the above

Question 13

A time draft

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) written order instructing the importer or his agent that calls for payment the amount specified on its face on a certain date. 
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) written order instructing the importer or his agent that calls for payment the amount specified on its face on a certain date. 
D) none of the above

Question 14

Under the terms of Islamic finance (Shari'ah law)

Accepted Answer

A) selling debt at a reduced value is strictly forbidden. 
B) charging interest is OK, but short selling stock is forbidden. 
C) buying low and selling high is forbidden. 
D) none of the above 
A) selling debt at a reduced value is strictly forbidden. 
B) charging interest is OK, but short selling stock is forbidden. 
C) buying low and selling high is forbidden. 
D) none of the above

Question 15

A counterpurchase

Accepted Answer

A) involves a technology transfer via the sale of a manufacturing plant: as part of the terms, the seller of the plant agrees to purchase a certain portion of the plant output. 
B) is similar to a buy-back transaction but the seller of the plant agrees to buy unrelated goods. 
C) is a form of barter. 
D) involves two parties agreeing to buy a specified amount of goods or services from one another. 
A) involves a technology transfer via the sale of a manufacturing plant: as part of the terms, the seller of the plant agrees to purchase a certain portion of the plant output. 
B) is similar to a buy-back transaction but the seller of the plant agrees to buy unrelated goods. 
C) is a form of barter. 
D) involves two parties agreeing to buy a specified amount of goods or services from one another.

Question 16

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 discounts the B/A with the importer's bank.

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 17

Among the reasons put forth for government assistance in exporting

Accepted Answer

A) success in international trade is fundamentally important for a country. 
B) success in exporting implies that there is demand for a country's products, that its labor force is employed, and that some resources are used for technological advancement. 
C) to be successful in international trade means that the government is popular. 
D) both a) and b) 
A) success in international trade is fundamentally important for a country. 
B) success in exporting implies that there is demand for a country's products, that its labor force is employed, and that some resources are used for technological advancement. 
C) to be successful in international trade means that the government is popular. 
D) both a) and b)

Question 18

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 19

The time from acceptance to maturity on a $6,000,000 banker's acceptance is 360 days.
The importing bank's acceptance commission is 2 percent and that the market rate for 360-day B/As is 3 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 20

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.
-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 > 5.11% compounded

A typical foreign trade transaction requires three basic documents

There are several types of countertrade transactions:

In a forfaiting transaction,the forfait is usually

Arguments in favor of countertrade include benefits such as

Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

An offset transaction

If the importing bank's acceptance commission is 1.25 percent,determine the amount the exporter will receive if he holds the B/A until maturity.

A switch trade

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. -Determine the amount the exporter will receive if he holds the B/A until maturity.

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 amount the exporter will receive if he discounts the B/A with the importer's bank.

A buy-back transaction

A time draft

Under the terms of Islamic finance (Shari'ah law)

A counterpurchase

Among the reasons put forth for government assistance in exporting

Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

The time from acceptance to maturity on a $6,000,000 banker's acceptance is 360 days. The importing bank's acceptance commission is 2 percent and that the market rate for 360-day B/As is 3 percent. -Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

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

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Exam 20: International Trade Finance

A typical foreign trade transaction requires three basic documents

There are several types of countertrade transactions:

In a forfaiting transaction,the forfait is usually

Arguments in favor of countertrade include benefits such as

Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

An offset transaction

If the importing bank's acceptance commission is 1.25 percent,determine the amount the exporter will receive if he holds the B/A until maturity.

A switch trade

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. -Determine the amount the exporter will receive if he holds the B/A until maturity.

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 amount the exporter will receive if he discounts the B/A with the importer's bank.

A buy-back transaction

A time draft

Under the terms of Islamic finance (Shari'ah law)

A counterpurchase

Among the reasons put forth for government assistance in exporting

Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

The time from acceptance to maturity on a $6,000,000 banker's acceptance is 360 days. The importing bank's acceptance commission is 2 percent and that the market rate for 360-day B/As is 3 percent. -Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

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