EXIM Midterm

Which of these is not a form of pre-shipment finance?

Advance against export bills sent on collection

Which document specifies the name of the country where goods are produced?

Certificate of origin

Which of the following is not a payment method for international trade?

Consignment

The main advantage for direct exporters is that they can have _______ over export, pricing, sales promotion, after-sales service, etc.

Direct control

A foreign merchant who purchases the products from the manufacturer and sells them at a profit is called a:

Distributor.

All of the following are major types of indirect intermediaries EXCEPT:

Distributors

Which of these accurately describes CIF?

FOB + Shipping + Freight + Insurance

A banker who adds his confirmation to LC is known as advising bank.

False

Advance payment is the safest method from the importer's side.

False

For an Importer, sight bill is more convenient than the Usance bill.

False

In a CIF contract; it is not the responsibility of the seller to procure a contract of insurance for the shipped goods

False

Special Import License and General license are of nomenclature.

False

The exporter draws a Usance bill under the documents against payment method.

False

_______ means that the price quoted includes all costs, including transport and other charges, incurred up to the time the goods are loaded onto a ship for transporting them abroad.

Free-on-board

Which of the following is not a party to a letter of credit?

Governing bank

In ____________ , the exporter ells good directly to or through an independent domestic intermediary in the exporter's home country that exports the products to foreign markets.

Indirect selling

Which of the following statements is FALSE regarding the role of the customs agency of a government?

It deals with the administration of certain navigation laws and treaties.

Which of the following is typically true of an export management company?

It operates on a contractual basis for a manufacturer by helping obtain orders for its clients' products.

An exporter prepares the _________ to give an idea to the importer that 'if you place the order with me and when I export, your invoice will look like this.'

Pro forma invoice

Which of these is not a principal export document?

Pro forma invoice

The certificate of origin will not have:

Shipping port details

When the drawer, i.e., exporter, expects the drawee, i.e., the importer, to make payment immediately upon the draft being presented, the draft is called ________. However, when the exporter agrees to give credit of say 30 days or 60 days, the draft is called ________.

Sight draft, usance draft

SWIFT stands for __________

Society for Worldwide Interbank Financial Telecommunication

Keeping other things constant, logic demands that US dollar should definitely become costlier when

The US interest rate increases whereas the US inflation rate decreases

Which of the following is true of Export Trading Companies in the United States?

They are like independent distributors that match up buyers and sellers.

Banks sanction packing credit limit to exporter initially, normally at concessional rate of interest in most of the countries.

True

Generally, the amount of packing credit will not exceed the FOB value or domestic cost or production, whichever is lower.

True

In FOB contracts, risks associated with freight escalation have to be borne by the importer.

True

In documents against acceptance method, the buyer can take possession of goods without making the payment.

True

In export business, the parties involved in the contract agree mutually about the applicability of particular country's law.

True

The forward premium (or discount) usually reflects the difference between the home and foreign interest rates.

True

The prime objective of export promotion council is to promote and develop the exports of the country.

True

What is the full form of UCPDC?

Uniforms Custom and Practice for Documentary Credits

Exporters use an export management company

an indirect selling strategy.

A document that is a receipt for goods delivered to the common carrier for transportation, a contract for the services rendered by the carriers, and a document of title is known as a(n):

bill of lading

A document that is a receipt for goods delivered to the common carrier for transportation, a contract for the services rendered by the carriers, and a document of title is known as a(n):

bill of lading.

A revocable letter of credit

can be amended by any of the parties involved at any point

An irrevocable letter of credit:

can be amended only if all parties involved agree

A confirmed letter of credit

cannot be amended.

Countries often use _______________ to determine the specific tariff schedule for imports; it is a document that indicates where products originate.

certificate of origin

Major Korean international trading companies are part of the large Korean business groups called:

chaebol.

A bill for goods from the seller to the buyer that contains the description of the goods, the address of the buyer and seller, and delivery and payment terms is known as a:

commercial invoice

A bill for goods issued by the seller that contains the description of the goods, the address of the buyer and seller, and delivery and payment terms is known as a:

commercial invoice.

From the exporter's point of view, all of the following are major issues that relate to the financial aspects of exporting EXCEPT:

intermodal transportation

Which of the following major issues DOES NOT relate to the financial aspects of exporting?

location of production

A letter of credit:

obligates the importer's bank to honor a draft presented to it.

Which of the following basic methods of payments is the least secure in terms of security to the exporter?

open account

A document that controls exports and is used to compile trade statistics is known as a:

shipper's export declaration.

The _______________, the Japanese equivalent word for trading company, can trace its roots back to the late nineteenth century, when Japan embarked on an aggressive modernization process.

sogo shosha

Assume that goods are available to an importer before payment, that payment is made by the importer after the buyer sells the goods, and that the risk to the importer is negligible. Which type of payment method for international trade is likely being used in this example?

time draft/usance bill