chapter 16

which of the following is true of exporting?

a common pitfall of exporting is a poo understanding of sompetitive conditions in the foreign market

with of the following exporting financing method is most risky for importers?

advance payment

the foreign credit insurance association provides coverage

against commercial risks and political risks faced by exporters

_____ is viewed as the most restrictive countertrade arrangment.

barter

in a letter of credit transaction, the importer secures the letter of credit

before product shipment

which of the following is a document used to give the tatty of the products to a bank?

bill of lading

an _____ occurs when a firm builds a plant in a country and agrees to take a certain percentage of the plants output as a partial payment for the contract

buyback

____ is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or non existent.

countertrade

a ____ is the instrument normally used in international commerce to effect payment

draft

_____ are export specialists that act as the export marketing department or international department for their client firms

export management companies (EMCs)

in an ______, one party agrees to purchase goods and services with a specified percentage of the proceeds from the original sale and this party can fulfill the obligation with any firm in the country to which the sale is being made

offset

which of the following exporting financing method is most risky for exporters?

open account

In an international transaction involving a bank as a third party, the exportor ships the product after

the bank promises to pay on the importers behalf

which os the following is a disadvantage of using a letter of credit (L/C)?

the importer must pay a bank fee for the letter of credit

a ____ allows for a delay in payment - normally 30, 60, 90 or 120 days

time draft