Exam 19: Financing International Trade

A bill of exchange requesting the bank to pay the face amount at a future date is a:

The risk to the exporter is highest with the ____ method.

Which of the following is not a trade financing method used in international trade from an exporter's perspective?

The all-in-rate a bank charges its customer(s) for accepting drafts includes both the discount rate and the acceptance commission.

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

An irrevocable L/C obligates the issuing bank to honor all drawings presented in conformity with the terms of the L/C.

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.

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

A banker's acceptance is a draft drawn on and accepted by a(n) ____.

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

The bill of exchange serves as a receipt for shipment and a summary of freight charges; most importantly, it conveys title to the merchandise.

A bill of exchange requesting the bank to pay the face amount upon presentation of documents is a:

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