Question 1

Eximbank has recently become more aggressive in fighting perceived abuses by foreign export-credit agencies. One area that Eximbank has targeted is

Accepted Answer

A)  foreign mixed-credit financing 
B)  inexpensive political risk insurance 
C)  inexpensive credit risk insurance 
D)  preliminary commitments 
A)  foreign mixed-credit financing 
B)  inexpensive political risk insurance 
C)  inexpensive credit risk insurance 
D)  preliminary commitments

Question 2

Which of the following L/Cs is safest for the exporter?

Accepted Answer

A)  revocable, confirmed L/C 
B)  irrevocable, unconfirmed L/C 
C)  irrevocable, confirmed L/C 
D)  revocable L/C 
A)  revocable, confirmed L/C 
B)  irrevocable, unconfirmed L/C 
C)  irrevocable, confirmed L/C 
D)  revocable L/C

Question 3

Which of the following payment methods provides the exporter with the strongest protection against risk?

Accepted Answer

A)  Cash in advance 
B)  Letter of credit 
C)  Draft 
D)  Consignment 
A)  Cash in advance 
B)  Letter of credit 
C)  Draft 
D)  Consignment

Question 4

Microsoft sells software to a French firm. In return, the French firm's bank, Credit Agricole, acknowledges it will pay Microsoft after the software is delivered to its client. Microsoft has most probably used

Accepted Answer

A)  accounts receivable financing 
B)  factoring 
C)  forfaiting 
D)  letter of credit 
A)  accounts receivable financing 
B)  factoring 
C)  forfaiting 
D)  letter of credit

Question 5

Which of the following is NOT an important attribute of a bankers' acceptance?

Accepted Answer

A)  makes an unconditional promise to pay the holder of the draft a stated amount on a specified day 
B)  effectively substitutes its own credit for that of a borrower 
C)  creates a negotiable instrument that may be freely traded 
D)  offers the holder a binding agreement to repayment by the exporter if the importer defaults 
A)  makes an unconditional promise to pay the holder of the draft a stated amount on a specified day 
B)  effectively substitutes its own credit for that of a borrower 
C)  creates a negotiable instrument that may be freely traded 
D)  offers the holder a binding agreement to repayment by the exporter if the importer defaults

Question 6

Which of the following organizations was created by the Bankers' Association for Foreign Trade to mobilize private capital for financing the export of big-ticket items by U.S. firms?

Accepted Answer

A)  Eximbank 
B)  Private Export Funding Corporation 
C)  Foreign Credit Insurance Association 
D)  Bankers' Export Financing Association 
A)  Eximbank 
B)  Private Export Funding Corporation 
C)  Foreign Credit Insurance Association 
D)  Bankers' Export Financing Association

Question 7

Precor sells exercise equipment to thousands of health clubs and sporting goods stores around the world. Its average order size is about $3,500. Which of the following techniques would you recommend to Precor to deal with its credit risk?

Accepted Answer

A)  insure the receivables through the FCIA, which will charge a 1.2% fee to cover 90% of the receivables 
B)  use a factor, who will charge a 1.3% export factoring fee 
C)  request letters of credit from customers. The customers will have to pay $75 plus 0.5% for each letter of credit. To remain competitive, Precor will have to reduce its prices to reimburse customers for their L/C costs 
D)  all are about equally acceptable 
A)  insure the receivables through the FCIA, which will charge a 1.2% fee to cover 90% of the receivables 
B)  use a factor, who will charge a 1.3% export factoring fee 
C)  request letters of credit from customers. The customers will have to pay $75 plus 0.5% for each letter of credit. To remain competitive, Precor will have to reduce its prices to reimburse customers for their L/C costs 
D)  all are about equally acceptable

Question 8

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

Accepted Answer

A)  the authenticity of an accepted draft is separated from the underlying commercial transaction 
B)  the accepted draft may not be dishonored for reason of a dispute between the exporter and importer 
C)  the accepted draft is automatically guaranteed by the Eximbank 
D)  both a and b 
A)  the authenticity of an accepted draft is separated from the underlying commercial transaction 
B)  the accepted draft may not be dishonored for reason of a dispute between the exporter and importer 
C)  the accepted draft is automatically guaranteed by the Eximbank 
D)  both a and b

Question 9

RJR Nabisco sells its export receivables to a firm that takes responsibility for collecting payment from the importers. RJR has used

Accepted Answer

A)  accounts receivable financing 
B)  factoring 
C)  forfaiting 
D)  letter of credit 
A)  accounts receivable financing 
B)  factoring 
C)  forfaiting 
D)  letter of credit

Question 10

Which one of the following conditions is NOT required for a draft to be negotiable under the U.S. Uniform Commercial Code?

Accepted Answer

A)  to be in writing 
B)  signed by the drawer 
C)  an open amount of money 
D)  an unconditional order to pay 
A)  to be in writing 
B)  signed by the drawer 
C)  an open amount of money 
D)  an unconditional order to pay

Eximbank has recently become more aggressive in fighting perceived abuses by foreign export-credit agencies. One area that Eximbank has targeted is

Which of the following L/Cs is safest for the exporter?

Which of the following payment methods provides the exporter with the strongest protection against risk?

Microsoft sells software to a French firm. In return, the French firm's bank, Credit Agricole, acknowledges it will pay Microsoft after the software is delivered to its client. Microsoft has most probably used

Which of the following is NOT an important attribute of a bankers' acceptance?

Which of the following organizations was created by the Bankers' Association for Foreign Trade to mobilize private capital for financing the export of big-ticket items by U.S. firms?

Precor sells exercise equipment to thousands of health clubs and sporting goods stores around the world. Its average order size is about $3,500. Which of the following techniques would you recommend to Precor to deal with its credit risk?

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

RJR Nabisco sells its export receivables to a firm that takes responsibility for collecting payment from the importers. RJR has used

Which one of the following conditions is NOT required for a draft to be negotiable under the U.S. Uniform Commercial Code?

Introduction: Multinational Enterpriseand Multinational Financial Management

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Anaylsis

The Foreign Exchange Markets

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Market

The Euromarkets

The Cost of Capital for Foreign Investment

International Portfolio Investment

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Current Asset Management and Short Team Financing

Managing the Multinational Financial System

Filters

Exam 18: Financing Foreign Trade

Eximbank has recently become more aggressive in fighting perceived abuses by foreign export-credit agencies. One area that Eximbank has targeted is

Which of the following L/Cs is safest for the exporter?

Which of the following payment methods provides the exporter with the strongest protection against risk?

Microsoft sells software to a French firm. In return, the French firm's bank, Credit Agricole, acknowledges it will pay Microsoft after the software is delivered to its client. Microsoft has most probably used

Which of the following is NOT an important attribute of a bankers' acceptance?

Which of the following organizations was created by the Bankers' Association for Foreign Trade to mobilize private capital for financing the export of big-ticket items by U.S. firms?

Precor sells exercise equipment to thousands of health clubs and sporting goods stores around the world. Its average order size is about $3,500. Which of the following techniques would you recommend to Precor to deal with its credit risk?

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

RJR Nabisco sells its export receivables to a firm that takes responsibility for collecting payment from the importers. RJR has used

Which one of the following conditions is NOT required for a draft to be negotiable under the U.S. Uniform Commercial Code?

Introduction: Multinational Enterpriseand Multinational Financial Management

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Anaylsis

The Foreign Exchange Markets

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Market

The Euromarkets

The Cost of Capital for Foreign Investment

International Portfolio Investment

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Current Asset Management and Short Team Financing

Managing the Multinational Financial System

Filters