Exam 20: International Trade Finance

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 holds it to maturity.

A time draft

An offset transaction

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

In a consignment sale

The British version of the Eximbank

The ________ sends a purchase order to the ________. The ________ applies to his bank for a letter of credit.

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.

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.

Through its Medium and Long-Term Guarantee Program,Eximbank helps U.S.exporters develop and expand their overseas sales by

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

A counterpurchase

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

Some Generalizations about Countertrade 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.

Some Generalizations about Countertrade 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 that 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.

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 Eximbank helps U.S.exporters develop and expand their overseas sales by

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

Arguments in favor of countertrade include benefits such as

There are several types of countertrade transactions: