Question 1

The exporter that offers "open account" terms is less likely to clinch a sale than one that offers more secure terms,such as "letter of credit" terms.

Accepted Answer

A) True 
 B)False  False

Question 2

A bank guarantee that is requested by a beneficiary to ensure that the contractor is bidding in good faith and will enter the contract if awarded is called a(n)

Accepted Answer

A)  tender guarantee or bid guarantee. 
B)  performance guarantee. 
C)  maintenance guarantee. 
D)  advance payment guarantee or repayment guarantee. 
E)  None of the above 
A)  tender guarantee or bid guarantee. 
B)  performance guarantee. 
C)  maintenance guarantee. 
D)  advance payment guarantee or repayment guarantee. 
E)  None of the above A

Question 3

Among the following terms of payment,which is the one which is the most customer-friendly and still protects the exporter from the risk of non-payment?

Accepted Answer

A)  a letter of credit 
B)  open account 
C)  open account with credit insurance 
D)  international forfeiting 
E)  None of the above 
A)  a letter of credit 
B)  open account 
C)  open account with credit insurance 
D)  international forfeiting 
E)  None of the above C

Question 4

The UPC 600 is

Accepted Answer

A)  used only in open accounts. 
B)  normally not used when a letter of credit is issued through the SWIFT network. 
C)  the Universal Customs and Practice for Documentary Credit, 2007 revision, Publication 600 of the International Chamber of Commerce. 
D)  All of the above 
E)  None of the above 
A)  used only in open accounts. 
B)  normally not used when a letter of credit is issued through the SWIFT network. 
C)  the Universal Customs and Practice for Documentary Credit, 2007 revision, Publication 600 of the International Chamber of Commerce. 
D)  All of the above 
E)  None of the above

Question 5

Since a draft (or a bill of exchange)is a legal document in the importing country,the courts in the importing country would consider non-payment by an importer as a domestic issue.

Accepted Answer

A) True 
 B)False

Question 6

SWIFT stands for

Accepted Answer

A)  Southwestern International Fund Transfers. 
B)  Sales World Institutional Financial Telecommunications. 
C)  Serving-the-World Institutional Financial Transactions. 
D)  Society for Worldwide Institutional Transfers. 
E)  None of the above 
A)  Southwestern International Fund Transfers. 
B)  Sales World Institutional Financial Telecommunications. 
C)  Serving-the-World Institutional Financial Transactions. 
D)  Society for Worldwide Institutional Transfers. 
E)  None of the above

Question 7

A date draft goes into effect at the time the draft is endorsed (signed).

Accepted Answer

A) True 
 B)False

Question 8

A problem with TradeCard is that it is an extremely expensive alternative.

Accepted Answer

A) True 
 B)False

Question 9

A letter of credit is more secure than cash in advance.

Accepted Answer

A) True 
 B)False

Question 10

Credit terms can be considerably lengthened through

Accepted Answer

A)  a letter of credit. 
B)  trade acceptance. 
C)  banker's acceptance. 
D)  international forfaiting. 
E)  None of the above 
A)  a letter of credit. 
B)  trade acceptance. 
C)  banker's acceptance. 
D)  international forfaiting. 
E)  None of the above

Question 11

The importer's bank is called the

Accepted Answer

A)  applicant. 
B)  beneficiary. 
C)  issuing bank. 
D)  advising bank. 
E)  None of the above 
A)  applicant. 
B)  beneficiary. 
C)  issuing bank. 
D)  advising bank. 
E)  None of the above

Question 12

The rules of the URR 725 of the International Chamber of Commerce apply to ___________________ rather than to exporters.

Accepted Answer

The answer of The rules of the URR 725 of...

Question 13

A standby letter of credit is similar to a "simple" letter of credit except for

Accepted Answer

A)  it generally has a much longer validity period. 
B)  it usually applies to more than one shipment from the exporter to the importer. 
C)  it allows the exporter to extend an open account to the importer, using the letter of credit only if the importer doesn't meet its obligations. 
D)  All of the above 
E)  None of the above 
A)  it generally has a much longer validity period. 
B)  it usually applies to more than one shipment from the exporter to the importer. 
C)  it allows the exporter to extend an open account to the importer, using the letter of credit only if the importer doesn't meet its obligations. 
D)  All of the above 
E)  None of the above

Question 14

While a cash-in-advance transaction shows a lack of it,an open account demonstrates that the exporter has ____________________ toward the importer.

Accepted Answer

The answer of While a cash-in-advance transaction shows a lack...

Question 15

The risk(s)that an exporter takes in requesting cash in advance as a means of payment is/are

Accepted Answer

A)  fluctuations in the exchange rate. 
B)  it puts the exporter at a competitive disadvantage. 
C)  it can increase inventory stockouts. 
D)  All of the above 
E)  None of the above 
A)  fluctuations in the exchange rate. 
B)  it puts the exporter at a competitive disadvantage. 
C)  it can increase inventory stockouts. 
D)  All of the above 
E)  None of the above

Question 16

The responsibilities of the presenting bank in the importing country generally stop at notifying the importer that the documents have arrived and at requesting that the importer endorse the draft or at requesting payment before releasing the documents.This is called trade acceptance.

Accepted Answer

A) True 
 B)False

Question 17

An aval

Accepted Answer

A)  is a used only in open accounts. 
B)  means funds are available. 
C)  makes the presenting bank a co-signer of a draft. 
D)  All of the above 
E)  None of the above 
A)  is a used only in open accounts. 
B)  means funds are available. 
C)  makes the presenting bank a co-signer of a draft. 
D)  All of the above 
E)  None of the above

Question 18

Among other reasons,international transactions are perceived to have more risk of non-payment because of

Accepted Answer

A)  a lack of credit information. 
B)  a lack of personal contact. 
C)  no easy legal recourse. 
D)  All of the above 
E)  None of the above 
A)  a lack of credit information. 
B)  a lack of personal contact. 
C)  no easy legal recourse. 
D)  All of the above 
E)  None of the above

Question 19

It is possible to add a draft to a letter of credit.

Accepted Answer

A) True 
 B)False

Question 20

In a letter of credit,the creditworthiness of the exporter is substituted for the creditworthiness of the importer.

Accepted Answer

A) True 
 B)False

The exporter that offers "open account" terms is less likely to clinch a sale than one that offers more secure terms,such as "letter of credit" terms.

A bank guarantee that is requested by a beneficiary to ensure that the contractor is bidding in good faith and will enter the contract if awarded is called a(n)

Among the following terms of payment,which is the one which is the most customer-friendly and still protects the exporter from the risk of non-payment?

The UPC 600 is

Since a draft (or a bill of exchange)is a legal document in the importing country,the courts in the importing country would consider non-payment by an importer as a domestic issue.

SWIFT stands for

A date draft goes into effect at the time the draft is endorsed (signed).

A problem with TradeCard is that it is an extremely expensive alternative.

A letter of credit is more secure than cash in advance.

Credit terms can be considerably lengthened through

The importer's bank is called the

The rules of the URR 725 of the International Chamber of Commerce apply to ___________________ rather than to exporters.

A standby letter of credit is similar to a "simple" letter of credit except for

While a cash-in-advance transaction shows a lack of it,an open account demonstrates that the exporter has ____________________ toward the importer.

The risk(s)that an exporter takes in requesting cash in advance as a means of payment is/are

The responsibilities of the presenting bank in the importing country generally stop at notifying the importer that the documents have arrived and at requesting that the importer endorse the draft or at requesting payment before releasing the documents.This is called trade acceptance.

An aval

Among other reasons,international transactions are perceived to have more risk of non-payment because of

It is possible to add a draft to a letter of credit.

In a letter of credit,the creditworthiness of the exporter is substituted for the creditworthiness of the importer.

Introduction

International Supply Chain Management

International Logistics Infrastructure

Methods of Entry into Foreign Markets

International Contracts

Terms of Trade or Incoterms

Currency of Payment (Managing Transaction Risks)

International Commercial Documents

International Insurance

International Ocean Transportation

International Air Transportation

International Land and Multi-Modal Transportation

Packaging for Export

International Logistics Security

Customs Clearance

Using International Logistics for Strategic Advantage

Filters

Exam 7: Terms of Payment

The exporter that offers "open account" terms is less likely to clinch a sale than one that offers more secure terms,such as "letter of credit" terms.

A bank guarantee that is requested by a beneficiary to ensure that the contractor is bidding in good faith and will enter the contract if awarded is called a(n)

Among the following terms of payment,which is the one which is the most customer-friendly and still protects the exporter from the risk of non-payment?

The UPC 600 is

Since a draft (or a bill of exchange)is a legal document in the importing country,the courts in the importing country would consider non-payment by an importer as a domestic issue.

SWIFT stands for

A date draft goes into effect at the time the draft is endorsed (signed).

A problem with TradeCard is that it is an extremely expensive alternative.

A letter of credit is more secure than cash in advance.

Credit terms can be considerably lengthened through

The importer's bank is called the

The rules of the URR 725 of the International Chamber of Commerce apply to ___________________ rather than to exporters.

A standby letter of credit is similar to a "simple" letter of credit except for

While a cash-in-advance transaction shows a lack of it,an open account demonstrates that the exporter has ____________________ toward the importer.

The risk(s)that an exporter takes in requesting cash in advance as a means of payment is/are

The responsibilities of the presenting bank in the importing country generally stop at notifying the importer that the documents have arrived and at requesting that the importer endorse the draft or at requesting payment before releasing the documents.This is called trade acceptance.

An aval

Among other reasons,international transactions are perceived to have more risk of non-payment because of

It is possible to add a draft to a letter of credit.

In a letter of credit,the creditworthiness of the exporter is substituted for the creditworthiness of the importer.

Introduction

International Supply Chain Management

International Logistics Infrastructure

Methods of Entry into Foreign Markets

International Contracts

Terms of Trade or Incoterms

Currency of Payment (Managing Transaction Risks)

International Commercial Documents

International Insurance

International Ocean Transportation

International Air Transportation

International Land and Multi-Modal Transportation

Packaging for Export

International Logistics Security

Customs Clearance

Using International Logistics for Strategic Advantage

Filters