Question 1

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 creditE) A) and D)
F) A) and C)

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/CE) A) and C)
F) B) and C)

Question 3

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 bE) None of the above
F) All of the above

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 creditE) C) and D)
F) B) and C)

Question 5

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 payE) A) and D)
F) All of the above

Question 6

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 acceptableE) B) and D)
F) A) and C)

Question 7

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 commitmentsE) None of the above
F) B) and C)

Question 8

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 defaultsE) A) and B)
F) None of the above

Question 9

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)   ConsignmentE) B) and D)
F) None of the above

Question 10

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 AssociationE) A) and C)
F) None of the above

Exam 18: Financing Foreign Trade

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

Correct Answer
verified

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?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

Exam 18: Financing Foreign Trade

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified