Question 1

In international trade matters,counterparty risk refers to the:

Accepted Answer

A) possibility that other parties may be affected by performance of a contract. 
B) risk that the other party to a contract will not perform their duties under the contract. 
C) possibility that other parties should have been made parties to the contract. 
D) risk that one party to a contract may make more profit from the contract than was anticipated by the other party. 
A) possibility that other parties may be affected by performance of a contract. 
B) risk that the other party to a contract will not perform their duties under the contract. 
C) possibility that other parties should have been made parties to the contract. 
D) risk that one party to a contract may make more profit from the contract than was anticipated by the other party. B

Question 2

When an importer receives title to the goods shipped by the exporter only upon the importers payment for those goods,the transaction is referred to as:

Accepted Answer

A) documents against acceptance. 
B) documents against payment. 
C) an open account. 
D) a consignment. 
A) documents against acceptance. 
B) documents against payment. 
C) an open account. 
D) a consignment. B

Question 3

Explain the relationship between GATT and WTO.

Accepted Answer

The General Agreement on Tariffs and Trade was an international trade agreement signed in 1947 with the purpose of reducing trade barriers and increasing free trade around the world.In 1995,the World Trade Organization replaced the General Agreement on Tariffs and Trade,but the general purpose of the World Trade organization is the same as the General Agreement on Tariffs and Trade,to reduce barriers to trade worldwide and to encourage free trade.

Question 4

If the importer pays for a shipment of foreign goods before the goods are shipped:

Accepted Answer

A) the transaction is referred to as using the cash advance method. 
B) the importer will require that the exporter guarantee that the shipment will be made by having the shipment insured by the government of the exporter's country. 
C) the transaction is referred to as using the "trust-the-exporter" method. 
D) all of the risks of the transaction are transferred to the exporter. 
A) the transaction is referred to as using the cash advance method. 
B) the importer will require that the exporter guarantee that the shipment will be made by having the shipment insured by the government of the exporter's country. 
C) the transaction is referred to as using the "trust-the-exporter" method. 
D) all of the risks of the transaction are transferred to the exporter.

Question 5

What is the difference between an order bill of lading and a straight bill of lading?

Accepted Answer

A) An order bill of lading contains a special provision that allows the holder of the bill of lading to direct that the goods covered by the bill of lading be delivered to an alternate destination,while a straight bill of lading does not contain that provision. 
B) An order bill of lading allows the holder of the bill of lading to return the goods covered by the bill of lading to the exporter,while the straight bill of lading does not contain that provision. 
C) An order bill of lading allows for an adjustment to the sale price of the goods covered by the bill of lading while the straight bill of lading does not allow that adjustment. 
D) An order bill of lading transfers title to the goods being shipped to the holder of the order bill of lading,while the straight bill of lading does not transfer title. 
A) An order bill of lading contains a special provision that allows the holder of the bill of lading to direct that the goods covered by the bill of lading be delivered to an alternate destination,while a straight bill of lading does not contain that provision. 
B) An order bill of lading allows the holder of the bill of lading to return the goods covered by the bill of lading to the exporter,while the straight bill of lading does not contain that provision. 
C) An order bill of lading allows for an adjustment to the sale price of the goods covered by the bill of lading while the straight bill of lading does not allow that adjustment. 
D) An order bill of lading transfers title to the goods being shipped to the holder of the order bill of lading,while the straight bill of lading does not transfer title.

Question 6

What kind of products usually face higher import/export regulation than most other products?

Accepted Answer

A) Industrial products 
B) Consumer products 
C) Products used to product other products 
D) Agricultural products 
A) Industrial products 
B) Consumer products 
C) Products used to product other products 
D) Agricultural products

Question 7

The International Bank for Reconstruction and Development is primarily funded by:

Accepted Answer

A) interest collected on loans made in past years. 
B) the member nations of the United Nations. 
C) issuing bonds in global debt markets. 
D) fines imposed by the World Trade Organization for trade restriction violations. 
A) interest collected on loans made in past years. 
B) the member nations of the United Nations. 
C) issuing bonds in global debt markets. 
D) fines imposed by the World Trade Organization for trade restriction violations.

Question 8

What factors can reduce or eliminate the many of the risks that importer and exporters face in international transactions?

Accepted Answer

A) Counterparty knowledge and trust 
B) Well drafted contracts and liquidated damage provisions 
C) Security deposits and established collection policies 
D) Limitations on credit sales and factoring 
A) Counterparty knowledge and trust 
B) Well drafted contracts and liquidated damage provisions 
C) Security deposits and established collection policies 
D) Limitations on credit sales and factoring

Question 9

What are the unique causes of delay that may be encountered in shipping goods by cargo ship?

Accepted Answer

A) Transit workers' strikes 
B) Wars and political unrest 
C) Loading and unloading and transportation to and from the ship 
D) The time required for the goods to clear customs 
A) Transit workers' strikes 
B) Wars and political unrest 
C) Loading and unloading and transportation to and from the ship 
D) The time required for the goods to clear customs

Question 10

What is an open account in the context of international trade?

Accepted Answer

A) An open account is an arrangement whereby the exporter automatically ships a specific quantity of a specific good to the importer at regular intervals. 
B) An open account is an arrangement whereby the importer and the exporter agree on a time of payment after the importer receives the goods sold by the exporter. 
C) An open account is an arrangement in which the importer and exporter agree to trade goods and net the amount owed rather than each paying the other for goods purchased. 
D) An open account is an arrangement in which the importer agrees to pay the exporter for goods that have been shipped by the exporter but not received by the importer. 
A) An open account is an arrangement whereby the exporter automatically ships a specific quantity of a specific good to the importer at regular intervals. 
B) An open account is an arrangement whereby the importer and the exporter agree on a time of payment after the importer receives the goods sold by the exporter. 
C) An open account is an arrangement in which the importer and exporter agree to trade goods and net the amount owed rather than each paying the other for goods purchased. 
D) An open account is an arrangement in which the importer agrees to pay the exporter for goods that have been shipped by the exporter but not received by the importer.

Question 11

What characteristics do open account arrangements and consignment arrangements have in common?

Accepted Answer

A) Both arrangements require the intervention of a third party to ensure that the arrangement is carried out on all sides. 
B) Both arrangements are based on the assumption that the exchange rate between the importer's currency and the exporter's currency will not change. 
C) Both arrangements require that the exporter rely on the importer's promise to pay for the goods at a specific time in the future. 
D) Both arrangements rely on government guarantees to reduce counterparty risk. 
A) Both arrangements require the intervention of a third party to ensure that the arrangement is carried out on all sides. 
B) Both arrangements are based on the assumption that the exchange rate between the importer's currency and the exporter's currency will not change. 
C) Both arrangements require that the exporter rely on the importer's promise to pay for the goods at a specific time in the future. 
D) Both arrangements rely on government guarantees to reduce counterparty risk.

Question 12

If a bank issuing a letter of credit accepts the time draft that is issued in connection with the letter of credit,a _______________________ results.

Accepted Answer

A) sight draft 
B) banker's acceptance 
C) bill of lading 
D) transfer of title 
A) sight draft 
B) banker's acceptance 
C) bill of lading 
D) transfer of title

Question 13

The periodic negotiations of the WTO aimed at eliminating specific forms of unfair trade practices are called:

Accepted Answer

A) conferences. 
B) rounds. 
C) agreements. 
D) accords. 
A) conferences. 
B) rounds. 
C) agreements. 
D) accords.

Question 14

In an international transaction,the document issued by the exporter that describes the goods being sold in detail is called the:

Accepted Answer

A) letter of credit. 
B) bill of lading. 
C) commercial invoice. 
D) trade receipt. 
A) letter of credit. 
B) bill of lading. 
C) commercial invoice. 
D) trade receipt.

Question 15

If there is informational asymmetry in a transaction,who bears the primary risk of default?

Accepted Answer

A) The exporter 
B) The importer 
C) Both the exporter and importer have the same risk of default 
D) The financial institution financing the transaction 
A) The exporter 
B) The importer 
C) Both the exporter and importer have the same risk of default 
D) The financial institution financing the transaction

Question 16

What are some of the primary reasons that countries impose trade barriers?

Accepted Answer

A) Revenue production and limitation of consumer choices 
B) Economic protection and safety 
C) Taxation and protection of industrial technology secrets 
D) Protection of domestic industries and retaliation against other countries 
A) Revenue production and limitation of consumer choices 
B) Economic protection and safety 
C) Taxation and protection of industrial technology secrets 
D) Protection of domestic industries and retaliation against other countries

Question 17

An order or demand issued by one party to another party to pay a specific sum of money is called a:

Accepted Answer

A) letter of credit. 
B) bill of lading. 
C) draft. 
D) consignment. 
A) letter of credit. 
B) bill of lading. 
C) draft. 
D) consignment.

Question 18

The mission of the G8:

Accepted Answer

A) is to provide loans and grants to member nations. 
B) seeks to encourage foreign direct investment in developing nations. 
C) states that all nations are entitled to balanced economic growth. 
D) is not stated but,rather,is developing. 
A) is to provide loans and grants to member nations. 
B) seeks to encourage foreign direct investment in developing nations. 
C) states that all nations are entitled to balanced economic growth. 
D) is not stated but,rather,is developing.

Question 19

If an importer has an intermediary guarantee payment to the exporter for the goods purchased from the exporter as soon as specific requirements are met,the guarantee provided by that intermediary is called a:

Accepted Answer

A) payment guarantee. 
B) bill of lading. 
C) letter of credit. 
D) banker's acceptance. 
A) payment guarantee. 
B) bill of lading. 
C) letter of credit. 
D) banker's acceptance.

Question 20

The explicit mission of the IMF is to:

Accepted Answer

A) encourage foreign direct investment in developing countries. 
B) facilitate the expansion and balanced growth of world trade. 
C) act as the lender of last resort for world financial institutions. 
D) buy and sell currencies to control exchange rates around the world. 
A) encourage foreign direct investment in developing countries. 
B) facilitate the expansion and balanced growth of world trade. 
C) act as the lender of last resort for world financial institutions. 
D) buy and sell currencies to control exchange rates around the world.

In international trade matters,counterparty risk refers to the:

When an importer receives title to the goods shipped by the exporter only upon the importers payment for those goods,the transaction is referred to as:

Explain the relationship between GATT and WTO.

If the importer pays for a shipment of foreign goods before the goods are shipped:

What is the difference between an order bill of lading and a straight bill of lading?

What kind of products usually face higher import/export regulation than most other products?

The International Bank for Reconstruction and Development is primarily funded by:

What factors can reduce or eliminate the many of the risks that importer and exporters face in international transactions?

What are the unique causes of delay that may be encountered in shipping goods by cargo ship?

What is an open account in the context of international trade?

What characteristics do open account arrangements and consignment arrangements have in common?

If a bank issuing a letter of credit accepts the time draft that is issued in connection with the letter of credit,a _______________________ results.

The periodic negotiations of the WTO aimed at eliminating specific forms of unfair trade practices are called:

In an international transaction,the document issued by the exporter that describes the goods being sold in detail is called the:

If there is informational asymmetry in a transaction,who bears the primary risk of default?

What are some of the primary reasons that countries impose trade barriers?

An order or demand issued by one party to another party to pay a specific sum of money is called a:

The mission of the G8:

If an importer has an intermediary guarantee payment to the exporter for the goods purchased from the exporter as soon as specific requirements are met,the guarantee provided by that intermediary is called a:

The explicit mission of the IMF is to:

Introduction

International Financial Markets: Structure and Innovation

Currency and Eurocurrency Derivatives

Currency Systems and Valuation

Currency Parity Conditions

Currency Risk Exposure Measurement

Currency Exposure Management

Capital Budgeting

Advanced Capital Budgeting

Long-Term Financing

Optimizing and Financing Working Capital

International Alliances and Acquisitions

International Taxation and Accounting

International Portfolio Investments

Filters

Exam 13: International Trade

In international trade matters,counterparty risk refers to the:

When an importer receives title to the goods shipped by the exporter only upon the importers payment for those goods,the transaction is referred to as:

Explain the relationship between GATT and WTO.

If the importer pays for a shipment of foreign goods before the goods are shipped:

What is the difference between an order bill of lading and a straight bill of lading?

What kind of products usually face higher import/export regulation than most other products?

The International Bank for Reconstruction and Development is primarily funded by:

What factors can reduce or eliminate the many of the risks that importer and exporters face in international transactions?

What are the unique causes of delay that may be encountered in shipping goods by cargo ship?

What is an open account in the context of international trade?

What characteristics do open account arrangements and consignment arrangements have in common?

If a bank issuing a letter of credit accepts the time draft that is issued in connection with the letter of credit,a _______________________ results.

The periodic negotiations of the WTO aimed at eliminating specific forms of unfair trade practices are called:

In an international transaction,the document issued by the exporter that describes the goods being sold in detail is called the:

If there is informational asymmetry in a transaction,who bears the primary risk of default?

What are some of the primary reasons that countries impose trade barriers?

An order or demand issued by one party to another party to pay a specific sum of money is called a:

The mission of the G8:

If an importer has an intermediary guarantee payment to the exporter for the goods purchased from the exporter as soon as specific requirements are met,the guarantee provided by that intermediary is called a:

The explicit mission of the IMF is to:

Introduction

International Financial Markets: Structure and Innovation

Currency and Eurocurrency Derivatives

Currency Systems and Valuation

Currency Parity Conditions

Currency Risk Exposure Measurement

Currency Exposure Management

Capital Budgeting

Advanced Capital Budgeting

Long-Term Financing

Optimizing and Financing Working Capital

International Alliances and Acquisitions

International Taxation and Accounting

International Portfolio Investments

Filters