Exam 19: Financing International Trade

With ____, the exporter ships the goods to the importer while still retaining actual title to the merchandise.

A bank issuing a letter of credit on behalf of an importer is obligated to honor the letter of credit regardless of the buyer's willingness or ability to pay.

Which of the following is not a program of the Export-Import Bank of the U.S.?

Under a letter of credit arrangement, the bank issuing the letter of credit is known as the ____ bank, the correspondent bank in the beneficiary's country to which the issuing bank sends the letter of credit is known as the ____ bank, and the bank that agrees to examine documents under the letter of credit and pay the beneficiary is called the ____ bank.

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

Countertrade represents foreign trade:

The sale of accounts receivable to a third party for a discount is called factoring.

The payment method that affords the supplier the greatest degree of protection is the prepayment method.

An exchange of goods between two parties under two distinct contracts expressed in monetary terms is:

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

The ____ is a self-sustaining federal agency responsible for insuring direct U.S. investments in foreign countries against the risk of currency inconvertibility, expropriation, and other political risks.

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

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

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

A(n) ____ letter of credit is not a trade-related letter of credit.

The ____ was established in 1934 with the intention to facilitate Soviet-American trade.

____ refers to the purchase of financial obligations, such as bills of exchange or promissory notes, without recourse to the original holder, usually the exporter.

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.

Consider an exporter that is willing to send goods to the importer without a guaranteed payment by the bank. The bank provides a loan to the exporter that is backed by the value of the exported goods. This reflects:

The Overseas Private Investment Corporation (OPIC) is owned by a consortium of commercial banks and industrial companies; it cooperates closely with the Export-Import Bank.