Question 1

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 2

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

Accepted Answer

A) 6.10% 
B) 9.29% 
C) 6.02% 
D) none of the above 
A) 6.10% 
B) 9.29% 
C) 6.02% 
D) none of the above

Question 3

A buy-back transaction

Accepted Answer

A) can be viewed as direct foreign investment in the purchasing country. 
B) can be viewed as direct foreign investment in the exporting country. 
C) can be viewed as indirect foreign investment in the purchasing country. 
D) none of the above 
A) can be viewed as direct foreign investment in the purchasing country. 
B) can be viewed as direct foreign investment in the exporting country. 
C) can be viewed as indirect foreign investment in the purchasing country. 
D) none of the above

Question 4

A buy-back transaction

Accepted Answer

A) is also called a bilateral clearing agreement. 
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) 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) 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) involves two parties agreeing to buy a specified amount of goods or services from one another. 
D) all of the above

Question 5

Among the reasons put forth for government assistance in exporting

Accepted Answer

A) success in international trade is fundamentally important for a country. 
B) success in exporting implies that there is demand for a country's products, that its labor force is employed, and that some resources are used for technological advancement. 
C) to be successful in international trade means that the government is popular. 
D) both a and b 
A) success in international trade is fundamentally important for a country. 
B) success in exporting implies that there is demand for a country's products, that its labor force is employed, and that some resources are used for technological advancement. 
C) to be successful in international trade means that the government is popular. 
D) both a and b

Question 6

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 above. 
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 above.

Question 7

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:

Accepted Answer

A) 13.08% 
B) 6.54% 
C) 4.06% 
D) None of the above 
A) 13.08% 
B) 6.54% 
C) 4.06% 
D) None of the above

Question 8

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 9

A typical foreign trade transaction requires three basic documents

Accepted Answer

A) letter of credit, bill of lading, and shipping documents. 
B) time draft, banker's acceptance, and bill of lading. 
C) letter of credit, time draft, and bill of lading. 
D) letter of credit, banker's acceptance, and bill of lading. 
A) letter of credit, bill of lading, and shipping documents. 
B) time draft, banker's acceptance, and bill of lading. 
C) letter of credit, time draft, and bill of lading. 
D) letter of credit, banker's acceptance, and bill of lading.

Question 10

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 11

In a forfaiting transaction, the forfait

Accepted Answer

A) buys the notes at a discount from face value from the importer. 
B) buys the notes at a discount from face value from the exporter. 
C) redeems the notes at a face value to the exporter. 
D) none of the above 
A) buys the notes at a discount from face value from the importer. 
B) buys the notes at a discount from face value from the exporter. 
C) redeems the notes at a face value to the exporter. 
D) none of the above

Question 12

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

Accepted Answer

The answer of Determine the amount the exporter will receive...

Question 13

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

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 14

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 > 4.08% compounded

Question 15

International trade is more difficult and risky from the exporter's perspective than is domestic trade because

Accepted Answer

A) the exporter may not be familiar with the buyer, and thus not know if the importer is a good credit risk. 
B) if the merchandise is exported abroad and the buyer does not pay, it may prove difficult, if not impossible, for the exporter to have any legal recourse. 
C) political instability makes it risky to ship merchandise abroad certain to parts of the world. 
D) all of the above 
A) the exporter may not be familiar with the buyer, and thus not know if the importer is a good credit risk. 
B) if the merchandise is exported abroad and the buyer does not pay, it may prove difficult, if not impossible, for the exporter to have any legal recourse. 
C) political instability makes it risky to ship merchandise abroad certain to parts of the world. 
D) all of the above

Question 16

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 17

Countertrade transactions

Accepted Answer

A) are included in official trade statistics. 
B) are NOT included in official trade statistics. 
C) reduce trade imbalances and trade deficits. 
D) both a and c 
A) are included in official trade statistics. 
B) are NOT included in official trade statistics. 
C) reduce trade imbalances and trade deficits. 
D) both a and c

Question 18

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

Accepted Answer

A) direct loans to foreign importers. 
B) loan guarantees. 
C) credit insurance to U.S. exporters. 
D) all of the above 
A) direct loans to foreign importers. 
B) loan guarantees. 
C) credit insurance to U.S. exporters. 
D) all of the above

Question 19

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

Accepted Answer

A) protecting them against loss should a foreign buyer default. 
B) guaranteeing the loans made by private financial institutions to foreign importers. 
C) providing liquidity via the purchase of notes issued by Eximbank to finance the loans. 
D) none of the above 
A) protecting them against loss should a foreign buyer default. 
B) guaranteeing the loans made by private financial institutions to foreign importers. 
C) providing liquidity via the purchase of notes issued by Eximbank to finance the loans. 
D) none of the above

Question 20

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 > 2.05% compounded

The term "countertrade" refers to

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

A buy-back transaction

A buy-back transaction

Among the reasons put forth for government assistance in exporting

In the event of a default

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

A typical foreign trade transaction requires three basic documents

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

In a forfaiting transaction, the forfait

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

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

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

International trade is more difficult and risky from the exporter's perspective than is domestic trade because

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

Countertrade transactions

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

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

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

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

The term "countertrade" refers to

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

A buy-back transaction

A buy-back transaction

Among the reasons put forth for government assistance in exporting

In the event of a default

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

A typical foreign trade transaction requires three basic documents

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

In a forfaiting transaction, the forfait

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

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

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

International trade is more difficult and risky from the exporter's perspective than is domestic trade because

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

Countertrade transactions

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

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

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

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