Question 1

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 above are true statements 
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 above are true statements

Question 2

Some Generalizations about Countertrade
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.

Accepted Answer

The answer of Some Generalizations about Countertrade
The time from acceptance...

Question 3

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 above 
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 above

Question 4

Export-Import Bank (Eximbank)is an independent agency of the United States government that facilitates and finances U.S.export trade.Eximbank'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

Accepted Answer

A) (i) and (ii) 
B) (i), (ii), and (iii) 
C) (i), (ii), (iii), and (iv) 
D) (i), (ii), (iii), (iv), and (v) 
A) (i) and (ii) 
B) (i), (ii), and (iii) 
C) (i), (ii), (iii), and (iv) 
D) (i), (ii), (iii), (iv), and (v)

Question 5

Banker's Acceptances usually have maturities ranging from

Accepted Answer

A) 30 to 180 days. 
B) 90 to 360 days. 
C) 1 year to 5 years. 
D) over 5 years. 
A) 30 to 180 days. 
B) 90 to 360 days. 
C) 1 year to 5 years. 
D) over 5 years.

Question 6

The armed forces of ____________ leads all government agencies in countertrade.

Accepted Answer

A) The United States 
B) Great Britain 
C) China 
D) The Philippines 
A) The United States 
B) Great Britain 
C) China 
D) The Philippines

Question 7

In a forfaiting transaction,the forfait is usually

Accepted Answer

A) the importer. 
B) the exporter. 
C) the bank. 
D) the title to the goods, or the bill of lading. 
A) the importer. 
B) the exporter. 
C) the bank. 
D) the title to the goods, or the bill of lading.

Question 8

Some Generalizations about Countertrade
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.
-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 9

The term "countertrade" refers to

Accepted Answer

A) many different types of transactions in which the seller provides a buyer with goods or services and promises in return to purchase goods or services from the buyer. 
B) barter, clearing arrangement, and switch trading. 
C) buy-back, counter purchase, and offset. 
D) all of the above 
A) many different types of transactions in which the seller provides a buyer with goods or services and promises in return to purchase goods or services from the buyer. 
B) barter, clearing arrangement, and switch trading. 
C) buy-back, counter purchase, and offset. 
D) all of the above

Question 10

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 above 
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 above

Question 11

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.

Accepted Answer

A) $906,250 
B) $909,375 
C) $968,750 
D) $993,750 
A) $906,250 
B) $909,375 
C) $968,750 
D) $993,750

Question 12

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 13

Some Generalizations about Countertrade
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 that 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

The answer of Some Generalizations about Countertrade
The time from acceptance...

Question 14

The three basic documents needed in a foreign trade transaction are

Accepted Answer

A) letter of credit, time draft, and proof of inspection. 
B) letter of credit, time draft, and a bill of lading. 
C) letter of credit, bill of lading, and insurance. 
D) time draft, bill of lading, and a pro forma statement. 
A) letter of credit, time draft, and proof of inspection. 
B) letter of credit, time draft, and a bill of lading. 
C) letter of credit, bill of lading, and insurance. 
D) time draft, bill of lading, and a pro forma statement.

Question 15

A bill of lading

Accepted Answer

A) is a document issued by the common carrier specifying that it has received the foods 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 above 
A) is a document issued by the common carrier specifying that it has received the foods 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 above

Question 16

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

Accepted Answer

The answer of Calculate the amount the banker will receive...

Question 17

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

Accepted Answer

The answer of Some Generalizations about Countertrade
The time from acceptance...

Question 18

Some Generalizations about Countertrade
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?

Accepted Answer

If his cost of funds > 5% compounded six

Question 19

A banker's acceptance is created when

Accepted Answer

A) is a document issued by the common carrier specifying that it has received the foods 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 that calls for payment upon physical delivery of goods matures. 
D) none of the above 
A) is a document issued by the common carrier specifying that it has received the foods 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 that calls for payment upon physical delivery of goods matures. 
D) none of the above

Question 20

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 above 
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 above

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

A clearing arrangement

Banker's Acceptances usually have maturities ranging from

The armed forces of ____________ leads all government agencies in countertrade.

In a forfaiting transaction,the forfait is usually

The term "countertrade" refers to

A switch trade

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.

The three basic documents needed in a foreign trade transaction are

A bill of lading

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

A banker's acceptance is created when

A typical foreign trade transaction requires three basic documents:

Globalization and the Multinational Firm

International Monetary System

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

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

A clearing arrangement

Banker's Acceptances usually have maturities ranging from

The armed forces of ____________ leads all government agencies in countertrade.

In a forfaiting transaction,the forfait is usually

The term "countertrade" refers to

A switch trade

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.

The three basic documents needed in a foreign trade transaction are

A bill of lading

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

A banker's acceptance is created when

A typical foreign trade transaction requires three basic documents:

Globalization and the Multinational Firm

International Monetary System

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.