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
QUESTION Which of the following is an advantage of a letter of credit for an importer? A. The importer does not have to pay for the merchandise until the documents have arrived. B. Obtaining pre-export financing becomes easier. C. It helps the importer to get goods for a lower price. D. It results in lower […]
Date: September 3rd, 2020
QUESTION In international commerce, an order written by an exporter instructing an importer to pay a specified amount of money at a specified time is known as a: A. bill of lading. B. draft. C. letter of credit. D. counterpurchase. E. buyback. ANSWER B
Date: September 3rd, 2020
