Question 1

With a ________,the exporter retains title and control of the goods until the importer has paid for the goods.

Accepted Answer

A)   sight draft
B)   time draft
C)   documentary collection
D)   clean bill of lading C

Question 2

Insurance policies that covers all of the exports of a firm are known as

Accepted Answer

A)   umbrella policies.
B)   floating policies.
C)   clean policies.
D)   multi-line policies. B

Question 3

With forfaiting,an irrevocable guarantee,known as a(n)________,may be created by the importer's government.

Accepted Answer

A)   trade acceptance
B)   documents against payment
C)   documents against acceptance
D)   aval D

Question 4

What are the advantages of a documentary credit to an exporter and an importer?

Accepted Answer

The answer of What are the advantages of a documentary...

Question 5

When an exporter plans to sell internationally,which one of the following would be considered most often?

Accepted Answer

A)   be paid as late as possible
B)   be paid in advance
C)   who has title to the goods
D)   countries where additional legal complexities exist

Question 6

What is the name of the request for payment that is created when an importer asks its bank to write a letter to an exporter indicating that the importer's bank will honor the request?

Accepted Answer

A)   draft
B)   bill of lading
C)   banker's acceptance
D)   commercial invoice

Question 7

Which one of the following methods of payments is most straightforward and one that is the least risky for the exporter?

Accepted Answer

A)   documents against payment
B)   time draft
C)   documentary collection
D)   cash in advance

Question 8

When a bank accepts a time draft for payment and sells it in the money markets,it is known as a

Accepted Answer

A)   time draft.
B)   trade acceptance.
C)   forfait transaction.
D)   banker's acceptance.

Question 9

A(n)________ is a document required by certain countries which forces the exporter to provide information to customs officials in the importing country with the goal of preventing false declarations of the value of the merchandise.

Accepted Answer

A)   consular invoice
B)   order bill of lading
C)   commercial invoice
D)   clean bill of lading

Question 10

What is the name of the company that purchases the accounts receivable of other firms?

Accepted Answer

A)   shipping company
B)   common carrier
C)   export factor
D)   insurance carrier

Question 11

If a bank accepts a ________ draft,it may become a ________.

Accepted Answer

A)   time, banker's acceptance
B)   sight, banker's acceptance
C)   time, trade acceptance
D)   sight, trade acceptance

Question 12

In which of the two forms of payment does the exporter not give up control of the merchandise until paid: a documents against payment collection or a documents against acceptance collection?

Accepted Answer

The answer of In which of the two forms of...

Question 13

What is a banker's acceptance? How is one created? Whose liability is it?

Accepted Answer

The answer of What is a banker's acceptance? How is...

Question 14

The Export-Import Bank of the United States is the only independent U.S.government corporation whose sole purpose is to support ________ in their efforts to conduct international trade.

Accepted Answer

A)   foreign importers
B)   small businesses
C)   U.S. exporters
D)   foreign exporters to the U.S.

Question 15

In which one of the following payments does the exporter retain title to the shipment as long as possible?

Accepted Answer

A)   sight draft
B)   time draft
C)   documentary collection
D)   documents against payment

Question 16

What is the correct term for documentary credit that cannot be changed unless all parties involved first agree to the change?

Accepted Answer

A)   revocable
B)   irrevocable
C)   confirmed
D)   straight

Question 17

Explain the fundamental financing problem in international trade?

Accepted Answer

The answer of Explain the fundamental financing problem in international...

Question 18

The terms and conditions of a(n)________ documentary credit cannot be changed unless all parties involved first agree to the change.

Accepted Answer

A)   revocable
B)   irrevocable
C)   confirmed
D)   straight

Question 19

If the transfer of title for the shipped goods is desired,which type of bill of lading is used?

Accepted Answer

A)   straight
B)   on-board
C)   received-for-shipment
D)   order

Question 20

A(n)________ is a contract issued to an exporter by the shipping company that agrees to transport the goods to their destination.

Accepted Answer

A)   consular invoice
B)   insurance certificate
C)   bill of lading
D)   draft

Exam 18: Financing International Trade