Exam 20: International Trade Finance

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:

The time from acceptance to maturity on a $500,000 banker's acceptance is 270 days.The importing bank's acceptance commission is 0.75 percent and that the market rate for 270-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?

A buy-back transaction

Banker's acceptances usually have maturities ranging from

Assume the time from acceptance to maturity on a $2,000,000 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.The bond equivalent yield that the bank earns in holding the B/A to maturity is

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.

Export-Import Bank (Ex-Im bank)is an independent agency of the United States government that facilitates and finances U.S.export trade.Ex-Im bank's purpose is to provide financing in situations where private financial institutions are unable or unwilling to because of which of the following reasons: (i)The loan maturity is too long. (ii)The amount of the loan is too large. (iii)The loan risk is too great. (iv)The importing firm has difficulty obtaining hard currency for payment. (v)There are no futures or forward contracts available for foreign exchange transactions.

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.

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

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.

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.

Among the reasons put forth for government assistance in exporting

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

The time from acceptance to maturity on a $500,000 banker's acceptance is 270 days.The importing bank's acceptance commission is 0.75 percent and that the market rate for 270-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.

The time from acceptance to maturity on a $3,000,000 banker's acceptance is 90 days. 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.

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.

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

When a bank purchases at a discount from an importer a series of promissory notes in favor of an exporter,this is called

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.