Question 1

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 options 
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 options

Question 2

The time from acceptance to maturity on a $3,000,000 banker's acceptance is 90 days. If 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) $2,945,625 
B) $2,990,625 
C) $3,000,000 
D) $3,009,375 
A) $2,945,625 
B) $2,990,625 
C) $3,000,000 
D) $3,009,375

Question 3

Countertrade transactions are

Accepted Answer

A) becoming obsolete as a means of conducting international trade transactions. 
B) gaining renewed prominence as a means of conducting international trade transactions. 
C) strictly a form of barter. 
D) none of the options 
A) becoming obsolete as a means of conducting international trade transactions. 
B) gaining renewed prominence as a means of conducting international trade transactions. 
C) strictly a form of barter. 
D) none of the options

Question 4

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 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 5

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

Question 6

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 7

A bill of lading

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 time draft that calls for payment upon physical delivery of goods. 
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 time draft that calls for payment upon physical delivery of goods. 
D) none of the options

Question 8

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

Accepted Answer

$8,750 = $

Question 9

The time from acceptance to maturity on a $3,000,000 banker's acceptance is 90 days. The bond equivalent yield that the exporter pays in discounting the B/A is

Accepted Answer

A) 6.10 percent. 
B) 9.29 percent. 
C) 6.02 percent. 
D) none of the options 
A) 6.10 percent. 
B) 9.29 percent. 
C) 6.02 percent. 
D) none of the options

Question 10

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 holds the B/A until maturity.

Accepted Answer

$1,000,000

Question 11

A time draft can become a negotiable money market instrument called

Accepted Answer

A) Eurodollars. 
B) a banker's acceptance. 
C) a letter of credit. 
D) a bill of lading. 
A) Eurodollars. 
B) a banker's acceptance. 
C) a letter of credit. 
D) a bill of lading.

Question 12

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 options 
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 options

Question 13

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 the market rate for 180-day B/As is 2 percent.
Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

Accepted Answer

$50,000 ×

Question 14

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

Question 15

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 options 
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 options

Question 16

Forfaiting (forfeiting)meets Islamic finance practices.

Accepted Answer

A) True 
 B)False

Question 17

The Ex-Im bank helps U.S.exporters develop and expand their overseas sales by

Accepted Answer

A) working capital guarantees. 
B) direct loans to foreign borrowers. 
C) loan guarantees. 
D) credit insurance. 
A) working capital guarantees. 
B) direct loans to foreign borrowers. 
C) loan guarantees. 
D) credit insurance.

Question 18

In the event of a default

Accepted Answer

A) the forfait does not have recourse against the exporter in the event of a default by the importer. 
B) the forfait does have recourse against the exporter in the event of a default by the importer 
C) the exporter will have to return the goods to the importer. 
D) none of the options 
A) the forfait does not have recourse against the exporter in the event of a default by the importer. 
B) the forfait does have recourse against the exporter in the event of a default by the importer 
C) the exporter will have to return the goods to the importer. 
D) none of the options

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 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

$625 = $50

Question 20

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

Accepted Answer

$300,000 ×

An offset transaction

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

Countertrade transactions are

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.

A counterpurchase

A bill of lading

The time from acceptance to maturity on a $3,000,000 banker's acceptance is 90 days. The bond equivalent yield that the exporter pays in discounting the B/A is

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 holds the B/A until maturity.

A time draft can become a negotiable money market instrument called

A switch trade

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 the market rate for 180-day B/As is 2 percent. Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

Arguments in favor of countertrade include benefits such as

A clearing arrangement

Forfaiting (forfeiting)meets Islamic finance practices.

The Ex-Im bank helps U.S.exporters develop and expand their overseas sales by

In the event of a default

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 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.

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

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

An offset transaction

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

Countertrade transactions are

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.

A counterpurchase

A bill of lading

The time from acceptance to maturity on a $3,000,000 banker's acceptance is 90 days. The bond equivalent yield that the exporter pays in discounting the B/A is

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 holds the B/A until maturity.

A time draft can become a negotiable money market instrument called

A switch trade

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 the market rate for 180-day B/As is 2 percent. Determine the amount the exporter will receive if he discounts the B/A with the importer's bank.

Arguments in favor of countertrade include benefits such as

A clearing arrangement

Forfaiting (forfeiting)meets Islamic finance practices.

The Ex-Im bank helps U.S.exporters develop and expand their overseas sales by

In the event of a default

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 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.

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

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

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.