Question 1

Sometimes a third bank,in addition to the issuing bank and the advising bank,becomes involved with a letter of credit.This bank is called a

Accepted Answer

A)  primary bank. 
B)  secondary bank. 
C)  intermediary bank. 
D)  amending bank. 
E)  None of the above 
A)  primary bank. 
B)  secondary bank. 
C)  intermediary bank. 
D)  amending bank. 
E)  None of the above

Question 2

In those few cases in which the letter of credit does not reflect exactly the pro-forma invoice (misspellings for example),it is wiser to attempt to obtain an amendment rather than to issue an invoice that matches the letter of credit.

Accepted Answer

A) True 
 B)False

Question 3

The instruction letter is part of the documentary collection

Accepted Answer

A)  that is not recognized in the United States. 
B)  in which the exporter, through the remitting bank, tells the presenting bank what it is expected to accomplish. 
C)  that is not recognized in the European Union. 
D)  All of the above 
E)  None of the above 
A)  that is not recognized in the United States. 
B)  in which the exporter, through the remitting bank, tells the presenting bank what it is expected to accomplish. 
C)  that is not recognized in the European Union. 
D)  All of the above 
E)  None of the above

Question 4

The greater the exposure,the more secure terms of payment should be.

Accepted Answer

A) True 
 B)False

Question 5

Following negotiations on a transaction which result in use of a letter of credit for payment,the next step is for the exporter to

Accepted Answer

A)  ship the goods to the importer. 
B)  ask the advising bank to open a letter of credit. 
C)  make a security deposit in the issuing bank. 
D)  All of the above 
E)  None of the above. 
A)  ship the goods to the importer. 
B)  ask the advising bank to open a letter of credit. 
C)  make a security deposit in the issuing bank. 
D)  All of the above 
E)  None of the above.

Question 6

Among country risks in international trade are labor issues.For instance,_____ has/have a strike almost every year at its/their ports.

Accepted Answer

A)  Chad 
B)  Paraguay 
C)  Japan 
D)  All of the above 
E)  None of the above 
A)  Chad 
B)  Paraguay 
C)  Japan 
D)  All of the above 
E)  None of the above

Question 7

When a letter of credit and the required documents do not match perfectly,it is normally the role of the ____________________ bank to request an amendment to the letter of credit from the bank of the other party.

Accepted Answer

The answer of When a letter of credit and the...

Question 8

International commercial risk can be evaluated by

Accepted Answer

A)  credit report companies. 
B)  factoring houses. 
C)  some accounting firms, insurance companies, and banks. 
D)  All of the above 
E)  None of the above 
A)  credit report companies. 
B)  factoring houses. 
C)  some accounting firms, insurance companies, and banks. 
D)  All of the above 
E)  None of the above

Question 9

Because of the risks associated with open-account transactions,when an exporter is forced for competitive reasons to offer an open account,the exporter should acquire credit ____________________ on those sales.

Accepted Answer

The answer of Because of the risks associated with open-account...

Question 10

The issuing bank's promise to pay is contingent upon the proper ____________________ being in order.

Accepted Answer

The answer of The issuing bank's promise to pay is...

Question 11

International factoring

Accepted Answer

A)  is more complicated than domestic factoring. 
B)  can be used to extend credit beyond what the exporter can normally afford. 
C)  often involves factoring firms in both the exporting and importing countries. 
D)  All of the above 
E)  None of the above 
A)  is more complicated than domestic factoring. 
B)  can be used to extend credit beyond what the exporter can normally afford. 
C)  often involves factoring firms in both the exporting and importing countries. 
D)  All of the above 
E)  None of the above

Question 12

In some cases,the exporter may want to grant some credit terms to the importer but still want some means to ensure it will be paid.In that case,it can request that the bank exchange documentation against a ____________________ draft in which the importer endorses to promise to pay within a certain time period.

Accepted Answer

The answer of In some cases,the exporter may want to...

Question 13

The most commonly used term of payment in the European Union is ____________________.

Accepted Answer

The answer of The most commonly used term of payment...

Question 14

Usually a bank guarantee is offered by a single bank,rather than multiple banks.

Accepted Answer

A) True 
 B)False

Question 15

In a letter of credit,the most important aspect is

Accepted Answer

A)  the creditworthiness of the importer. 
B)  the documentation of the transaction. 
C)  the creditworthiness of the exporter. 
D)  the promise of eventually changing to an open account. 
E)  None of the above 
A)  the creditworthiness of the importer. 
B)  the documentation of the transaction. 
C)  the creditworthiness of the exporter. 
D)  the promise of eventually changing to an open account. 
E)  None of the above

Question 16

It is often a disadvantage to request a letter of credit because of the costs (and the cumbersome process)associated with it.

Accepted Answer

A) True 
 B)False

Question 17

United States law prohibits bank guarantees.

Accepted Answer

A) True 
 B)False

Question 18

The most commonly used terms of payment for a customer located in the Middle East are

Accepted Answer

A)  letters of credit. 
B)  open accounts. 
C)  documentary collections. 
D)  cash in advance terms. 
E)  None of the above 
A)  letters of credit. 
B)  open accounts. 
C)  documentary collections. 
D)  cash in advance terms. 
E)  None of the above

Question 19

An irrevocable letter of credit cannot be canceled by the issuing bank unless the applicant agrees to it.

Accepted Answer

A) True 
 B)False

Question 20

In terms regarding letters of credit,the importer is called the ____________________.

Accepted Answer

The answer of In terms regarding letters of credit,the importer...

Sometimes a third bank,in addition to the issuing bank and the advising bank,becomes involved with a letter of credit.This bank is called a

In those few cases in which the letter of credit does not reflect exactly the pro-forma invoice (misspellings for example),it is wiser to attempt to obtain an amendment rather than to issue an invoice that matches the letter of credit.

The instruction letter is part of the documentary collection

The greater the exposure,the more secure terms of payment should be.

Following negotiations on a transaction which result in use of a letter of credit for payment,the next step is for the exporter to

Among country risks in international trade are labor issues.For instance,_____ has/have a strike almost every year at its/their ports.

When a letter of credit and the required documents do not match perfectly,it is normally the role of the ____________________ bank to request an amendment to the letter of credit from the bank of the other party.

International commercial risk can be evaluated by

Because of the risks associated with open-account transactions,when an exporter is forced for competitive reasons to offer an open account,the exporter should acquire credit ____________________ on those sales.

The issuing bank's promise to pay is contingent upon the proper ____________________ being in order.

International factoring

The most commonly used term of payment in the European Union is ____________________.

Usually a bank guarantee is offered by a single bank,rather than multiple banks.

In a letter of credit,the most important aspect is

It is often a disadvantage to request a letter of credit because of the costs (and the cumbersome process)associated with it.

United States law prohibits bank guarantees.

The most commonly used terms of payment for a customer located in the Middle East are

An irrevocable letter of credit cannot be canceled by the issuing bank unless the applicant agrees to it.

In terms regarding letters of credit,the importer is called the ____________________.

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

Sometimes a third bank,in addition to the issuing bank and the advising bank,becomes involved with a letter of credit.This bank is called a

In those few cases in which the letter of credit does not reflect exactly the pro-forma invoice (misspellings for example),it is wiser to attempt to obtain an amendment rather than to issue an invoice that matches the letter of credit.

The instruction letter is part of the documentary collection

The greater the exposure,the more secure terms of payment should be.

Following negotiations on a transaction which result in use of a letter of credit for payment,the next step is for the exporter to

Among country risks in international trade are labor issues.For instance,_____ has/have a strike almost every year at its/their ports.

When a letter of credit and the required documents do not match perfectly,it is normally the role of the ____________________ bank to request an amendment to the letter of credit from the bank of the other party.

International commercial risk can be evaluated by

Because of the risks associated with open-account transactions,when an exporter is forced for competitive reasons to offer an open account,the exporter should acquire credit ____________________ on those sales.

The issuing bank's promise to pay is contingent upon the proper ____________________ being in order.

International factoring

The most commonly used term of payment in the European Union is ____________________.

Usually a bank guarantee is offered by a single bank,rather than multiple banks.

In a letter of credit,the most important aspect is

It is often a disadvantage to request a letter of credit because of the costs (and the cumbersome process)associated with it.

United States law prohibits bank guarantees.

The most commonly used terms of payment for a customer located in the Middle East are

An irrevocable letter of credit cannot be canceled by the issuing bank unless the applicant agrees to it.

In terms regarding letters of credit,the importer is called the ____________________.

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