ch18
CHAPTER 18
Financing Foreign Trade
EASY (definitional)
18.1 Which of the following payment methods provides the exporter with the strongest protection against risk?
a) Cash in advance
b) Letter of credit
c) Draft
d) Consignment
Ans: a
Section: Cash in advance
Level: Easy
18.2 Which of the following payment methods provides both parties with a strong measure of protection against commercial and political risks?
a) Cash in advance
b) Letter of credit
c) Draft
d) Consignment
Ans: b
Section: Letter of credit
Level: Easy
18.3 Most L/Cs issued in connection with global trade transactions are
a) documentary
b) clean
c) revocable
d) created by a combination of a buyer and a seller alone
Ans: a
Section: Letter of credit
Level: Easy
18.4 An exporter shipping goods to a nation that may impose currency controls will seek an L/C that is
a) revocable
b) clean
c) documentary
d) confirmed by a domestic bank
Ans: d
Section: Letter of credit
Level: Easy
18.5 The party to a draft who signs and sends the draft to the second party is called the
a) drawer
b) payee
c) drawee
d) broker
Ans: a
Section: Draft
Level: Easy
18.6 RJR Nabisco sells its export receivables to a firm that takes responsibility for collecting payment from the importers. RJR has used
a) accounts receivable financing
b) factoring
c) forfaiting
d) letter of credit
Ans: b
Section: Factoring
Level: Easy
18.7 The only U.S. agency dedicated solely to financing and facilitating U.S. exports is the
a) Eximbank
b) Foreign Credit Insurance Association
c) Bankers' Association for Foreign Trade
d) Agency for International Development
Ans: a
Section: Export-import bank
Level: Easy
18.8 Suppose the Fluor Corporation is seeking to bid on a construction project in Turkey. Which Eximbank program will be most useful to Fluor?
a) "standby" loan commitment
b) Eximbank payment guarantee
c) preliminary commitment
d) Eximbank loan guarantee
Ans:
Financing Foreign Trade
EASY (definitional)
18.1 Which of the following payment methods provides the exporter with the strongest protection against risk?
a) Cash in advance
b) Letter of credit
c) Draft
d) Consignment
Ans: a
Section: Cash in advance
Level: Easy
18.2 Which of the following payment methods provides both parties with a strong measure of protection against commercial and political risks?
a) Cash in advance
b) Letter of credit
c) Draft
d) Consignment
Ans: b
Section: Letter of credit
Level: Easy
18.3 Most L/Cs issued in connection with global trade transactions are
a) documentary
b) clean
c) revocable
d) created by a combination of a buyer and a seller alone
Ans: a
Section: Letter of credit
Level: Easy
18.4 An exporter shipping goods to a nation that may impose currency controls will seek an L/C that is
a) revocable
b) clean
c) documentary
d) confirmed by a domestic bank
Ans: d
Section: Letter of credit
Level: Easy
18.5 The party to a draft who signs and sends the draft to the second party is called the
a) drawer
b) payee
c) drawee
d) broker
Ans: a
Section: Draft
Level: Easy
18.6 RJR Nabisco sells its export receivables to a firm that takes responsibility for collecting payment from the importers. RJR has used
a) accounts receivable financing
b) factoring
c) forfaiting
d) letter of credit
Ans: b
Section: Factoring
Level: Easy
18.7 The only U.S. agency dedicated solely to financing and facilitating U.S. exports is the
a) Eximbank
b) Foreign Credit Insurance Association
c) Bankers' Association for Foreign Trade
d) Agency for International Development
Ans: a
Section: Export-import bank
Level: Easy
18.8 Suppose the Fluor Corporation is seeking to bid on a construction project in Turkey. Which Eximbank program will be most useful to Fluor?
a) "standby" loan commitment
b) Eximbank payment guarantee
c) preliminary commitment
d) Eximbank loan guarantee
Ans: