Trade Finance

Test on TFCMS
Please select the best option in the following MCQs
Please write your name, roll no. & Section on the top right hand corner of the answer sheet
1. Trade involves movement of _______
a) Funds b) goods c) documents d) all of these

2. This is an example of Invisible trade transaction
a) Tourism b) Software c) a & b d) none of these

3. This is true for Financing against cheques :
a) To be provided only for customer b) To check the track record of customer
c) Both of these d) None of these

4. Providing finance against a LC bill is called
a) Bill Purchase b)Bill Discounting c) Negotiation d) All of these

5. A statement of age-wise debtors is obtained in case of Cash credit against
Book debts/ Debtors because: a) We can have lesser margin against older bills b) Old non-recoverable bills are not financed c) We will know how old is the relationship between the Buyer & Seller d) None of these

6. Advance against bills in the course of collection implies financing the bills
a) Just received across the counter
b) Already collected but not credited
c) Already sent for collection
d) None of these

7. Among these Clean Payments are:
a) Documentary Collection b) Documentary Credit
c) Both of these d) None of these

8. These are true for Clean Payments:
a) Bank’s role is limited to movement of Funds
b) All documents are handled by Seller & Buyer themselves
c) Both a & b
d) None of these

9. The most unfavourable system of trade transaction for the Seller is
a) Open account
b) Advance Payment
c) Documentary Collection
d) Documentary Credit
10. In documentary collection, the document can be released by
a) Payment b) Acceptance c) Negotiation d) Both Payment & acceptance

11. In Documentary