Exam 20: International Trade Finance

Suppose the face amount of a promissory note is $1,000,000 and the importer's bank charges an acceptance commission of 1.5 percent.The note is for 60 days.Calculate the amount of the acceptance commission that the bank will charge.

One of the steps to follow to develop an investment fund which has been structured to adhere to Shari'ah principles whilst at the same time making use of forfaiting assets was

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

In a consignment sale

Countertrade transactions

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

Assume the time from acceptance to maturity on a $10,000,000 banker's acceptance is 90 days.Further assume that the importing bank's acceptance commission is 1 percent and that the market rate for 90-day B/As is 3.0 percent.The bond equivalent yield that the exporter pays in discounting the B/A is:

Through its Export Credit Insurance Program,Eximbank helps U.S.exporters develop and expand their overseas sales by

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

In the event of a default

The bond equivalent yield that the exporter pays in discounting the B/A is:

Assume the time from acceptance to maturity on a $4,000,000 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 90-day B/As is 6.0 percent.Calculate the amount the exporter will receive if he holds it to maturity.

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 holds the B/A until maturity.

Countertrade transactions are

Assume the time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 days.Further assume that the importing bank's acceptance commission is 1.25 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.

Assume the time from acceptance to maturity on a $10,000,000 banker's acceptance is 90 days.Further assume that the importing bank's acceptance commission is 1 percent and that the market rate for 90-day B/As is 3.0 percent.The bond equivalent yield that the bank earns in holding the B/A to maturity is:

A buy-back transaction

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. -If the exporter's opportunity cost of capital is 11 percent,should he discount the B/A or hold it to maturity?

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

The primary methods of payment for foreign trades,ranked in the order of most secure to least secure for the exporter is