Question 1

Under the terms of Islamic finance (Shari'ah)

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 options 
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 options A

Question 2

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 options 
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 options B

Question 3

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

Accepted Answer

A) 3.05 percent. 
B) 3.01 percent. 
C) 3.07 percent. 
D) none of the options 
A) 3.05 percent. 
B) 3.01 percent. 
C) 3.07 percent. 
D) none of the options A

Question 4

A buy-back transaction

Accepted Answer

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

Question 5

A typical foreign trade transaction requires three basic documents:

Accepted Answer

A) letter of credit,time draft,and bill of lading. 
B) letter of credit,banker's acceptance,and bill of lading. 
C) letter of credit,time draft,and a banker's acceptance. 
D) none of the options 
A) letter of credit,time draft,and bill of lading. 
B) letter of credit,banker's acceptance,and bill of lading. 
C) letter of credit,time draft,and a banker's acceptance. 
D) none of the options

Question 6

The time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 days.The importing bank's acceptance commission is 1.25 percent and the market rate for 90-day B/As is 6 percent.
Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

Accepted Answer

$2,000,000

Question 7

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

$1,000,000

Question 8

A banker's acceptance is created when

Accepted Answer

A) a document issued by the common carrier specifies that it has received the goods for shipment; it can serve as title to the goods. 
B) after taking title to the goods via a bill of lading,the importer's bank accepts the time draft. 
C) a time draft calls for payment upon physical delivery of goods matures. 
D) none of the options 
A) a document issued by the common carrier specifies that it has received the goods for shipment; it can serve as title to the goods. 
B) after taking title to the goods via a bill of lading,the importer's bank accepts the time draft. 
C) a time draft calls for payment upon physical delivery of goods matures. 
D) none of the options

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 the market rate for 30-day B/As is 4 percent.
Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

Accepted Answer

$750 = $30

Question 10

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 the market rate for 360-day B/As is 3 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 > 3.1% compounded a

Question 11

The time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 days.The importing bank's acceptance commission is 1.25 percent and the market rate for 90-day B/As is 6 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 > 6.1% compounded q

Question 12

A time draft

Accepted Answer

A) is a document issued by the common carrier specifying that it has received the goods for shipment; it can serve as title to the goods. 
B) later becomes a banker's acceptance. 
C) is a 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 options 
A) is a document issued by the common carrier specifying that it has received the goods for shipment; it can serve as title to the goods. 
B) later becomes a banker's acceptance. 
C) is a 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 options

Question 13

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 14

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 holds it to maturity.

Accepted Answer

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

Question 15

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

Accepted Answer

A) the fund sponsors had to be careful in ensuring that the pool of non-Islamic forfaiting assets was not used to directly satisfy the Islamic compliant obligations under the commodity and trade financing arrangements. 
B) screening is required to ensure that the products underlying the LCs do not run counter to Shari'ah principles. 
C) there had to be a sign off by Islamic scholars to verify that Shari'ah strictures had been met with. 
D) all of the options 
A) the fund sponsors had to be careful in ensuring that the pool of non-Islamic forfaiting assets was not used to directly satisfy the Islamic compliant obligations under the commodity and trade financing arrangements. 
B) screening is required to ensure that the products underlying the LCs do not run counter to Shari'ah principles. 
C) there had to be a sign off by Islamic scholars to verify that Shari'ah strictures had been met with. 
D) all of the options

Question 16

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

Accepted Answer

A) $200,000 
B) $100,000 
C) $25,000 
D) $75,000 
A) $200,000 
B) $100,000 
C) $25,000 
D) $75,000

Question 17

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 holds the B/A until maturity.

Accepted Answer

$30,000,00

Question 18

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 the market rate for 30-day B/As is 4 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 19

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 20

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 options 
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 options

Under the terms of Islamic finance (Shari'ah)

In a forfaiting transaction,the forfait

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

A buy-back transaction

A typical foreign trade transaction requires three basic documents:

The time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 days.The importing bank's acceptance commission is 1.25 percent and the market rate for 90-day B/As is 6 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 $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.

A banker's acceptance is created when

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 the market rate for 30-day B/As is 4 percent. Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

A time draft

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 holds it to maturity.

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

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 holds the B/A until maturity.

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 the market rate for 30-day B/As is 4 percent. Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

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

International Monetary System

Globalization and the Multinational Firm

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

Under the terms of Islamic finance (Shari'ah)

In a forfaiting transaction,the forfait

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

A buy-back transaction

A typical foreign trade transaction requires three basic documents:

The time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 days.The importing bank's acceptance commission is 1.25 percent and the market rate for 90-day B/As is 6 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 $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.

A banker's acceptance is created when

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 the market rate for 30-day B/As is 4 percent. Calculate the amount the banker will receive if the exporter discounts the B/A with the importer's bank.

A time draft

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 holds it to maturity.

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

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 holds the B/A until maturity.

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 the market rate for 30-day B/As is 4 percent. Determine the bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

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

International Monetary System

Globalization and the Multinational Firm

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