QUESTION When a time draft is drawn on and accepted by a business firm, it is known as a(n): A. trade acceptance. B. in-transit bill. C. banker’s acceptance. D. bill of lading. E. letter of credit. ANSWER A
Date: September 3rd, 2020
QUESTION Firms engaged in international trade deal with people they may have never seen, who live in different countries, who speak different languages, and who abide by different legal systems. These factors result in: A. easy tracking of the parties involved. B. a lack of trust between the parties. C. strict enforcement of contractual obligations. […]
Date: September 3rd, 2020
QUESTION Which of the following is a characteristic of a time draft? A. It has no value given the deferred nature of the document. B. It is generally not preferred in international transactions. C. It is a negotiable instrument. D. It is also known as a bill of lading. E. It cannot be sold by […]
Date: September 3rd, 2020
QUESTION Which of the following is true of a letter of credit in international trade? 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 […]
Date: September 3rd, 2020
QUESTION Which of the following is issued to an exporter by a common carrier transporting the merchandise and serves as a receipt, a contract, and a document of title? A. Bill of lading B. Collateral C. Draft D. Letter of credit E. Bill of exchange ANSWER A
Date: September 3rd, 2020
QUESTION Which of the following is an advantage of having a letter of credit? 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. […]
Date: September 3rd, 2020
QUESTION When a bill of lading specifies that the carrier is obligated to provide a transportation service in return for a certain charge, it serves as a: A. contract. B. receipt. C. document of title. D. letter of credit. E. bill of exchange. ANSWER A
Date: September 3rd, 2020
QUESTION Which of the following is true of a letter of credit? A. It states that the bank will pay a specified sum of money to a beneficiary on presentation of particular, specified documents. B. It is a document written by an exporter instructing an importer to pay a specified amount of money at a […]
Date: September 3rd, 2020
QUESTION When serving as collateral, the bill of lading: A. can be used to advance funds to the exporter by its local bank before or during shipment. B. specifies that the carrier is obligated to provide a transportation service in return for a certain charge. C. can be used to obtain payment or a written […]
Date: September 3rd, 2020
QUESTION Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer? A. Bill of lading B. Time draft C. Letter of credit D. Sight draft E. Bill of exchange ANSWER C
Date: September 3rd, 2020
