Question 1

What kind of currency risk is faced by both importers and exporters in international transactions in goods?

Accepted Answer

A) Translation risk 
B) Interest rate risk 
C) Transaction risk 
D) Investment risk

Question 2

In a transaction involving a letter of credit,in addition to the importer and the exporter,what other two parties are usually involved?

Accepted Answer

A) The extending bank and the receiving bank 
B) The issuing bank and the confirming bank 
C) The paying banks and the paid bank 
D) The authorizing bank and the approving bank

Question 3

What was one of the most important results of the Uruguay Round of GATT?

Accepted Answer

A) The creation of the World Trade organization. 
B) The establishment of global rules protecting intellectual properties. 
C) The admission of China to the WTO. 
D) The creation of the International Monetary Fund.

Question 4

A government-sponsored institution that is intended to assist the import and export activities with the country by providing information,financing,and insurance is called a(n):

Accepted Answer

A) trade improvement council. 
B) foreign trade organization. 
C) export-import bank. 
D) foreign exchange market.

Question 5

What has been the greatest concern for labor interests arising from NAFTA?

Accepted Answer

A) U.S.labor interests have been concerned that the minimum wage in the U.S.would decrease. 
B) U.S.labor interests have been concerned that U.S.companies would close their U.S.operations and move them to Mexico. 
C) Mexican labor interests have been concerned that U.S.companies would move to Mexico and bring their U.S.workers with them. 
D) Mexican labor interests have been concerned that Mexican workers would be drawn to jobs in the U.S.

Question 6

Explain the process of documentary collections.

Accepted Answer

The answer of Explain the process of documentary collections....

Question 7

The participants in NAFTA are:

Accepted Answer

A) The United States,Canada,and Mexico. 
B) The United States,Canada,and Panama. 
C) The United States,Mexico,and Panama. 
D) The United States,Canada,and Cuba.

Question 8

The receipt issued by the carrier of goods,usually to the exporter,that confirms that the goods have been delivered to the carrier for shipment to the importer is called a:

Accepted Answer

A) bill of lading. 
B) letter of credit. 
C) banker's acceptance. 
D) invoice for shipment.

Question 9

Explain the differences between accounts receivable financing and accounts receivable factoring.

Accepted Answer

The answer of Explain the differences between accounts receivable financing...

Question 10

If an issuing bank pays its obligation under a letter of credit without collecting the amount paid from the importer receiving the goods that are subject to the letter of credit:

Accepted Answer

A) the bank has essentially financed the purchase of those goods for the importer,and the importer will have had to made arrangements to repay the bank for the amount that it paid plus interest. 
B) the bank can reclaim from the importer the goods that were purchased under the letter of credit. 
C) both the bank and the exporter who supplied the goods covered by the letter of credit have a claim against the importer receiving the goods. 
D) the exporter can reclaim the goods from the importer.

Exam 13: International Trade