Exam 20: International Trade Finance

Assume the time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 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.

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

Some Generalizations about Countertrade 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 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 $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 bond equivalent yield the importer's bank will earn from discounting the B/A with the exporter.

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

A time draft can become a negotiable money market instrument called

Some Generalizations about Countertrade 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 amount the exporter will receive if he holds the B/A until 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.The bond equivalent yield that the exporter pays in discounting the B/A is:

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

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.

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

The Export-Import Bank provides competitive assistance to U.S.exporters through

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

Under the terms of Islamic finance (Shari'ah law)

Assume the time from acceptance to maturity on a $2,000,000 banker's acceptance is 90 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 discounts the B/A with the importer's bank.

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.

A buy-back transaction

A buy-back transaction

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