Question 1

The Forlan Group is a firm that acts as an export marketing department for client firms.As an export specialist,The Forlan Group is a(n)

Accepted Answer

A) export management company. 
B) export-import firm. 
C) foreign direct investment management firm. 
D) strategy management company. 
E) association of export companies. 
A) export management company. 
B) export-import firm. 
C) foreign direct investment management firm. 
D) strategy management company. 
E) association of export companies.

Question 2

Stacy Morgan Apparel is new to exporting and is worried about not getting paid for its goods.Ally Jones,its CFO,is trying to convince the company CEO that by insisting on a letter of credit,Stacy Morgan Apparel is well covered financially.Which of the following aspects of a letter of credit in international trade should convince the company CEO?

Accepted Answer

A) No cash deposit or collateral is required from the importer. 
B) The exporter pays the trusted third party (usually a bank)a fee for the service. 
C) It becomes a financial contract between the trusted third party (usually a bank)and the exporter. 
D) It is issued by the exporter at the request of the importer. 
E) The creditworthiness of the importer is irrelevant when issuing a letter of credit. 
A) No cash deposit or collateral is required from the importer. 
B) The exporter pays the trusted third party (usually a bank)a fee for the service. 
C) It becomes a financial contract between the trusted third party (usually a bank)and the exporter. 
D) It is issued by the exporter at the request of the importer. 
E) The creditworthiness of the importer is irrelevant when issuing a letter of credit.

Question 3

In terms of using a third party in international trade,title to the products is given to a bank by the exporter in the form of a document known as a

Accepted Answer

A) merchandise bill. 
B) bill of lading. 
C) bill of exchange. 
D) draft. 
E) letter of credit. 
A) merchandise bill. 
B) bill of lading. 
C) bill of exchange. 
D) draft. 
E) letter of credit.

Question 4

Johnson Goods,a U.S.company is exporting to Watanabe Trading,a Japanese importer.The two parties agree on a draft,but Johnson Goods wants it to be a draft that is payable on presentation to Watanabe Trading.Johnson Goods is asking for a(n)

Accepted Answer

A) bill of lading. 
B) sight draft. 
C) letter of credit. 
D) time draft. 
E) offset. 
A) bill of lading. 
B) sight draft. 
C) letter of credit. 
D) time draft. 
E) offset.

Question 5

Which of the following is an advantage of having a letter of credit?

Accepted Answer

A) It allows payment for merchandise after its delivery. 
B) It facilitates an exporter to obtain pre-export financing. 
C) It allows an exporter to get a higher price for his or her goods. 
D) It helps exporters incur lower shipping costs. 
E) It does not require the importer to pay any fee. 
A) It allows payment for merchandise after its delivery. 
B) It facilitates an exporter to obtain pre-export financing. 
C) It allows an exporter to get a higher price for his or her goods. 
D) It helps exporters incur lower shipping costs. 
E) It does not require the importer to pay any fee.

Question 6

Jamal Steel,a rapidly growing small steel company with annual revenues of $8 million is looking to buy a large industrial furnace from Japan that is expected to cost $2 million.The exporter wants Jamal Steel to produce a letter of credit.Jamal Steel's CFO is reluctant to do so.Instead,the CFO wants an order written by the exporter instructing Jamal Steel to pay $2 million at a specified time.In international commerce,what the CFO is asking for is known as a

Accepted Answer

A) bill of lading. 
B) draft. 
C) letter of credit. 
D) counterpurchase. 
E) buyback. 
A) bill of lading. 
B) draft. 
C) letter of credit. 
D) counterpurchase. 
E) buyback.

Question 7

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Accepted Answer

A) switch trade. 
B) offset. 
C) buyback. 
D) arbitrage. 
E) barter. 
A) switch trade. 
B) offset. 
C) buyback. 
D) arbitrage. 
E) barter.

Question 8

A drawback of countertrade is that

Accepted Answer

A) it fails to enable firms to finance an export deal. 
B) it is detrimental to the economy of the importing country. 
C) developing nations have trouble raising the foreign exchange necessary to pay for imports. 
D) it does not allow firms to invest in an in-house trading department dedicated to arranging and managing deals. 
E) it may involve the exchange of poor-quality goods that cannot be disposed of profitably. 
A) it fails to enable firms to finance an export deal. 
B) it is detrimental to the economy of the importing country. 
C) developing nations have trouble raising the foreign exchange necessary to pay for imports. 
D) it does not allow firms to invest in an in-house trading department dedicated to arranging and managing deals. 
E) it may involve the exchange of poor-quality goods that cannot be disposed of profitably.

Question 9

Which of the following is true of counterpurchase?

Accepted Answer

A) It is the most restrictive countertrade arrangement. 
B) It is a reciprocal buying agreement. 
C) It is the simplest countertrade arrangement. 
D) It uses a specialized third-party trading house. 
E) It is the direct exchange of goods without a cash transaction. 
A) It is the most restrictive countertrade arrangement. 
B) It is a reciprocal buying agreement. 
C) It is the simplest countertrade arrangement. 
D) It uses a specialized third-party trading house. 
E) It is the direct exchange of goods without a cash transaction.

Question 10

TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period.This is an example of

Accepted Answer

A) switch trading. 
B) a buyback. 
C) a counterpurchase. 
D) an offset. 
E) barter. 
A) switch trading. 
B) a buyback. 
C) a counterpurchase. 
D) an offset. 
E) barter.

Question 11

A firm that enters many markets at once

Accepted Answer

A) runs the risk of spreading its limited management resources too thin. 
B) becomes established in all the markets. 
C) gets the time to learn about each market. 
D) has fewer export opportunities. 
E) reduces the costs of any subsequent failure. 
A) runs the risk of spreading its limited management resources too thin. 
B) becomes established in all the markets. 
C) gets the time to learn about each market. 
D) has fewer export opportunities. 
E) reduces the costs of any subsequent failure.

Question 12

Which of the following is a drawback of a countertrade agreement?

Accepted Answer

A) It fails to give firms a way to finance an export deal. 
B) It requires an in-house trading department to be maintained,which can be expensive and time-consuming. 
C) It is detrimental to the economy of the importing country. 
D) Developing nations may have trouble raising the foreign exchange necessary to pay for imports. 
E) It is not an acceptable means of trading in most developing countries. 
A) It fails to give firms a way to finance an export deal. 
B) It requires an in-house trading department to be maintained,which can be expensive and time-consuming. 
C) It is detrimental to the economy of the importing country. 
D) Developing nations may have trouble raising the foreign exchange necessary to pay for imports. 
E) It is not an acceptable means of trading in most developing countries.

Question 13

The Export-Import Bank provides financing aid to prospective U.S.exporters.

Accepted Answer

A) True 
 B)False

Question 14

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

Accepted Answer

Neophyte exporters tend to underestimate

Question 15

It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.

Accepted Answer

A) True 
 B)False

Question 16

When a time draft is presented to a drawee,he or she signifies acceptance of it by

Accepted Answer

A) delivering the goods immediately. 
B) paying the draft amount immediately. 
C) providing a collateral for the amount specified in the bill. 
D) writing or stamping a notice of acceptance on its face. 
E) selling the draft to an investor at a discount from its face value. 
A) delivering the goods immediately. 
B) paying the draft amount immediately. 
C) providing a collateral for the amount specified in the bill. 
D) writing or stamping a notice of acceptance on its face. 
E) selling the draft to an investor at a discount from its face value.

Question 17

A draft,an instrument normally used in international commerce to effect payment,is also known as a letter of credit.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true of medium-sized and small firms?

Accepted Answer

A) They are proactive about seeking opportunities for profitable exporting. 
B) They consider exporting only after their domestic market is saturated. 
C) They are not intimidated by the complexities of foreign legal systems. 
D) They have a high degree of familiarity with foreign market opportunities. 
E) They explore foreign markets to see where the opportunities lie for leveraging their technology. 
A) They are proactive about seeking opportunities for profitable exporting. 
B) They consider exporting only after their domestic market is saturated. 
C) They are not intimidated by the complexities of foreign legal systems. 
D) They have a high degree of familiarity with foreign market opportunities. 
E) They explore foreign markets to see where the opportunities lie for leveraging their technology.

Question 19

Describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

Accepted Answer

Despite institutional disadvantages,U.S.

Question 20

The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets,along with businesses they are in,is called the

Accepted Answer

A) ELAN list. 
B) "best prospects" list. 
C) "comparison shopping service." 
D) SCORE list. 
E) export management list. 
A) ELAN list. 
B) "best prospects" list. 
C) "comparison shopping service." 
D) SCORE list. 
E) export management list.

The Forlan Group is a firm that acts as an export marketing department for client firms.As an export specialist,The Forlan Group is a(n)

In terms of using a third party in international trade,title to the products is given to a bank by the exporter in the form of a document known as a

Johnson Goods,a U.S.company is exporting to Watanabe Trading,a Japanese importer.The two parties agree on a draft,but Johnson Goods wants it to be a draft that is payable on presentation to Watanabe Trading.Johnson Goods is asking for a(n)

Which of the following is an advantage of having a letter of credit?

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

A drawback of countertrade is that

Which of the following is true of counterpurchase?

TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period.This is an example of

A firm that enters many markets at once

Which of the following is a drawback of a countertrade agreement?

The Export-Import Bank provides financing aid to prospective U.S.exporters.

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.

When a time draft is presented to a drawee,he or she signifies acceptance of it by

A draft,an instrument normally used in international commerce to effect payment,is also known as a letter of credit.

Which of the following is true of medium-sized and small firms?

Describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets,along with businesses they are in,is called the

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Strategy of International Business

Entering Foreign Markets

Global Production and Supply Chain Management

Global Marketing and Research and Development

Global Human Resource Management

Filters

Exam 14: Exporting, Importing, and Countertrade

The Forlan Group is a firm that acts as an export marketing department for client firms.As an export specialist,The Forlan Group is a(n)

In terms of using a third party in international trade,title to the products is given to a bank by the exporter in the form of a document known as a

Johnson Goods,a U.S.company is exporting to Watanabe Trading,a Japanese importer.The two parties agree on a draft,but Johnson Goods wants it to be a draft that is payable on presentation to Watanabe Trading.Johnson Goods is asking for a(n)

Which of the following is an advantage of having a letter of credit?

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

A drawback of countertrade is that

Which of the following is true of counterpurchase?

TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period.This is an example of

A firm that enters many markets at once

Which of the following is a drawback of a countertrade agreement?

The Export-Import Bank provides financing aid to prospective U.S.exporters.

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.

When a time draft is presented to a drawee,he or she signifies acceptance of it by

A draft,an instrument normally used in international commerce to effect payment,is also known as a letter of credit.

Which of the following is true of medium-sized and small firms?

Describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets,along with businesses they are in,is called the

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Strategy of International Business

Entering Foreign Markets

Global Production and Supply Chain Management

Global Marketing and Research and Development

Global Human Resource Management

Filters