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.

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

Assume the time from acceptance to maturity on a $4,000,000 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 90-day B/As is 3.0 percent. Calculate the amount the exporter will receive if he discounts the B/A with the importer's bank.

A counterpurchase

There are several types of countertrade transactions:

Assume the time from acceptance to maturity on a $4,000,000 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 90-day B/As is 6.0 percent. Calculate the amount the exporter will receive if he holds it to maturity.

A clearing arrangement

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 $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.

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.

In a forfaiting transaction, the forfait is usually

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

Forfaiting, in which a bank purchases at a discount from an importer a series of promissory notes in favor of an exporter,

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

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

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

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

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

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

A switch trade