Exam 19: Financing International Trade

When using factoring to finance international trade, a bank will provide a loan to the exporter secured by an assignment of the account receivable.

The Direct Loan Program is administered by the:

A ____ is an unconditional promise drawn by one party, instructing the buyer to pay the face amount upon presentation.

The Working Capital Guarantee Program is administered by the:

Under prepayment, the exporter will not ship the goods until the buyer has remitted payment to the exporter.

Consider a bank that acknowledges that it will make payments on behalf of a computer importer after the computers are delivered to the importer. This reflects:

Under a countertrade arrangement, the exporter ships the goods to the importer while retaining title to the merchandise until it is sold.

In an open account transaction, the exporter ships the goods to the importer but retains title to the goods until they have been sold.

Which of the following is a reason why commercial banks can facilitate international trade?

____ promises to pay the beneficiary if they buyer fails to pay as agreed.

Under a(n) ____ arrangement, the exporter ships the goods to the importer while still retaining actual title to the merchandise.

The exchange of goods between two parties without the use of any currency as a medium of exchange is called factoring.

An irrevocable letter of credit can be cancelled or amended if the beneficiary consents to it.

Which of the following is not true regarding letters of credit?

If shipment is made under a time draft, the exporter is paid once shipment has been made and the draft is presented to the buyer for payment.

As part of Ex-Imbank's export credit insurance programs, a(an) ____ policy is generally issued to an administrator, such as a bank, trading company, insurance broker, or government agency, who then administers the policy for multiple exporters.

MNCs can use ____ to sell their existing accounts receivable as a means of obtaining cash.

Who bears the payment risk in a letter of credit?

In ____, a bank arranges to fund a loan to pay the exporter instead of charging the importer's account immediately.

The objectives of the Export-Import Bank of the United States include the assumption of underlying credit risk and country risk to encourage private lenders to finance export trade and the provision of direct loans to foreign buyers when private lenders are unwilling to do so.