Exam 19: Financing International Trade

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.

The interest rate the bank charges the customer in a banker's acceptance is referred to as the all-in rate; it entirely consists of the acceptance commission.

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

In ____, the exporter sells accounts receivable without recourse.

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

Of all the payment methods available in international trade, ____ probably affords the most protection to the exporter, while ____ probably affords the least protection.

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:

Who bears the payment risk in a letter of credit?

A ____ provides a summary of freight charges and conveys title to the merchandise.

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

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

The Working Capital Guarantee Program of the Private Export Funding Corporation (PEFCO) encourages commercial banks to extend short-term export financing to eligible exporters by providing a comprehensive guarantee that covers 100 percent of the loan's principal and interest.

Under a letter of credit, the exporter will not ship the goods until the buyer has remitted payment to the exporter.

A letter of credit does not guarantee that the goods purchased will be those invoiced and shipped.

The ____ is a private corporation owned by a consortium of commercial banks and industrial companies, but the ____ is a self-sustaining government agency.

According to the text, international trade activity has generally ____ over time. This should cause the popularity of trade finance techniques to ____ over time.

With ____, a bank purchases a receivable without recourse to the exporter.

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 not true regarding a banker's acceptance?

There is an active secondary market for banker's acceptances.