Question 1

Which one of the following is NOTtrue when shipping goods under documentary time drafts for acceptance?

Accepted Answer

A) the exporter is extending credit to the importer 
B) the exporter is relinquishing control of the goods in return for a signature on the acceptance to assure it of payment 
C) the importer is no longer bound to pay the draft to the exporter 
D) a bill of lading will be the most important document of the transaction 
A) the exporter is extending credit to the importer 
B) the exporter is relinquishing control of the goods in return for a signature on the acceptance to assure it of payment 
C) the importer is no longer bound to pay the draft to the exporter 
D) a bill of lading will be the most important document of the transaction

Question 2

Which of the following does NOT accompany a documentary draft?

Accepted Answer

A) bill of lading in negotiable form 
B) commercial invoice 
C) insurance certificate 
D) consular invoice 
A) bill of lading in negotiable form 
B) commercial invoice 
C) insurance certificate 
D) consular invoice

Question 3

Which of the following payment methods provides the exporter with the weakest protection against default risk?

Accepted Answer

A) Cash in advance 
B) Letter of credit 
C) Draft 
D) Consignment 
A) Cash in advance 
B) Letter of credit 
C) Draft 
D) Consignment

Question 4

Which of the following organizations was created by the Bankers' Association for Foreign Trade to mobilize private capital for financing the export of big?ticket items by U.S.firms?

Accepted Answer

A) Eximbank 
B) Private Export Funding Corporation 
C) Foreign Credit Insurance Association 
D) Bankers' Export Financing Association 
A) Eximbank 
B) Private Export Funding Corporation 
C) Foreign Credit Insurance Association 
D) Bankers' Export Financing Association

Question 5

Which of the following payment methods provides both parties with a strong measure of protection against commercial and political risks?

Accepted Answer

A) Cash in advance 
B) Letter of credit 
C) Draft 
D) Consignment 
A) Cash in advance 
B) Letter of credit 
C) Draft 
D) Consignment

Question 6

Which of the following is NOTan advantage to the importer of L/C financing?

Accepted Answer

A) any documents required are carefully inspected by clerks with years of experience 
B) an L/C is about as good as cash in advance 
C) the importer using an L/C can usually command better credit terms and/or prices 
D) L/C financing may be cheaper than the alternatives 
E) all of the above are advantages of the L/C to the importer 
A) any documents required are carefully inspected by clerks with years of experience 
B) an L/C is about as good as cash in advance 
C) the importer using an L/C can usually command better credit terms and/or prices 
D) L/C financing may be cheaper than the alternatives 
E) all of the above are advantages of the L/C to the importer

Question 7

Most L/Cs issued in connection with global trade transactions are

Accepted Answer

A) documentary 
B) clean 
C) revocable 
D) created by a combination of a buyer and a seller alone 
A) documentary 
B) clean 
C) revocable 
D) created by a combination of a buyer and a seller alone

Question 8

When a letter of credit is unconfirmed,the obligation to provide credit belongs to

Accepted Answer

A) the exporter 
B) the opening bank 
C) the importer 
D) the customs agents 
A) the exporter 
B) the opening bank 
C) the importer 
D) the customs agents

Question 9

Which one of the following is NOT a true economic rationale for countertrade?

Accepted Answer

A) many Third World countries use countertrade to conserve what little foreign exchange they have 
B) the goods taken in countertrade are usually the least difficult to market 
C) countertrade enables members of cartels such as OPEC to undercut an agreed-upon price without formally doing so 
D) the trade may circumvent tariffs 
A) many Third World countries use countertrade to conserve what little foreign exchange they have 
B) the goods taken in countertrade are usually the least difficult to market 
C) countertrade enables members of cartels such as OPEC to undercut an agreed-upon price without formally doing so 
D) the trade may circumvent tariffs

Question 10

Which of the following payment methods provides the exporter with the strongest protection against risk?

Accepted Answer

A) Cash in advance 
B) Letter of credit 
C) Draft 
D) Consignment 
A) Cash in advance 
B) Letter of credit 
C) Draft 
D) Consignment

Question 11

When factoring is done on a nonrecourse basis,the ___ has title to the receivables and the ___ is responsible for credit checking and collecting the receivables.

Accepted Answer

A) factor,factor 
B) factor,borrowing firm 
C) borrowing firm,factor 
D) borrowing firm,borrowing firm 
A) factor,factor 
B) factor,borrowing firm 
C) borrowing firm,factor 
D) borrowing firm,borrowing firm

Question 12

Which of the following L/Cs is safest for the exporter?

Accepted Answer

A) revocable,confirmed L/C 
B) irrevocable,unconfirmed L/C 
C) irrevocable,confirmed L/C 
D) revocable L/C 
A) revocable,confirmed L/C 
B) irrevocable,unconfirmed L/C 
C) irrevocable,confirmed L/C 
D) revocable L/C

Question 13

The only U.S.agency dedicated solely to financing and facilitating U.S.exports is the

Accepted Answer

A) Eximbank 
B) Foreign Credit Insurance Association 
C) Bankers' Association for Foreign Trade 
D) Agency for International Development 
A) Eximbank 
B) Foreign Credit Insurance Association 
C) Bankers' Association for Foreign Trade 
D) Agency for International Development

Question 14

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

Accepted Answer

A) the authenticity of an accepted draft is separated from the underlying commercial transaction 
B) the accepted draft may not be dishonored for reason of a dispute between the exporter and importer 
C) the accepted draft is automatically guaranteed by the Eximbank 
D) both a and b 
A) the authenticity of an accepted draft is separated from the underlying commercial transaction 
B) the accepted draft may not be dishonored for reason of a dispute between the exporter and importer 
C) the accepted draft is automatically guaranteed by the Eximbank 
D) both a and b

Which one of the following is NOTtrue when shipping goods under documentary time drafts for acceptance?

Which of the following does NOT accompany a documentary draft?

Which of the following payment methods provides the exporter with the weakest protection against default risk?

Which of the following organizations was created by the Bankers' Association for Foreign Trade to mobilize private capital for financing the export of big?ticket items by U.S.firms?

Which of the following payment methods provides both parties with a strong measure of protection against commercial and political risks?

Which of the following is NOTan advantage to the importer of L/C financing?

Most L/Cs issued in connection with global trade transactions are

When a letter of credit is unconfirmed,the obligation to provide credit belongs to

Which one of the following is NOT a true economic rationale for countertrade?

Which of the following payment methods provides the exporter with the strongest protection against risk?

When factoring is done on a nonrecourse basis,the _ has title to the receivables and the _ is responsible for credit checking and collecting the receivables.

Which of the following L/Cs is safest for the exporter?

The only U.S.agency dedicated solely to financing and facilitating U.S.exports is the

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

Introduction

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters

Exam 18: Financing Foreign Trade

Which one of the following is NOTtrue when shipping goods under documentary time drafts for acceptance?

Which of the following does NOT accompany a documentary draft?

Which of the following payment methods provides the exporter with the weakest protection against default risk?

Which of the following organizations was created by the Bankers' Association for Foreign Trade to mobilize private capital for financing the export of big?ticket items by U.S.firms?

Which of the following payment methods provides both parties with a strong measure of protection against commercial and political risks?

Which of the following is NOTan advantage to the importer of L/C financing?

Most L/Cs issued in connection with global trade transactions are

When a letter of credit is unconfirmed,the obligation to provide credit belongs to

Which one of the following is NOT a true economic rationale for countertrade?

Which of the following payment methods provides the exporter with the strongest protection against risk?

When factoring is done on a nonrecourse basis,the ___ has title to the receivables and the ___ is responsible for credit checking and collecting the receivables.

Which of the following L/Cs is safest for the exporter?

The only U.S.agency dedicated solely to financing and facilitating U.S.exports is the

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

Introduction

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters

When factoring is done on a nonrecourse basis,the _ has title to the receivables and the _ is responsible for credit checking and collecting the receivables.