QUESTION In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay Indicate whether the statement is true or false. ANSWER TRUE International practice is to use drafts to settle trade transactions. This differs from domestic practice in which the buyer […]
QUESTION Which of the following is an advantage of exporting? A. It helps in easy currency conversion. B. It provides large revenue and profit opportunities. C. It reduces the administrative costs incurred by a company. D. It helps companies increase their unit costs. E. It reduces paperwork and complex formalities. ANSWER B
QUESTION In international commerce, a person or business initiating a draft is known as the drafter and the party to whom the draft is presented is known as the draftee Indicate whether the statement is true or false. ANSWER FALSE A draft, sometimes referred to as a bill of exchange, is the instrument normally […]
QUESTION Many medium-sized and small firms are not proactive in seeking export opportunities because: A. they are familiar with the foreign market and do not find it challenging enough. B. the export market is similar to the home market in terms of legal and business practices. C. they are intimidated by the complexities and mechanics […]
QUESTION A bill of lading can function as collateral against which funds are advanced to the exporter by its local bank before final payment by the importer Indicate whether the statement is true or false. ANSWER TRUE A bill of lading is issued to the exporter by the common carrier transporting the merchandise. It […]
QUESTION Which of the following is a common pitfall that novice exporters come across? A. Poor understanding of the opportunities in the domestic market B. Low unit costs C. Increased economies of scale D. Problems securing financing E. Familiar distribution systems ANSWER D
QUESTION The Export-Import Bank provides financing aid to prospective U.S. exporters Indicate whether the statement is true or false. ANSWER TRUE Prospective U.S. exporters can draw on two forms of government-backed assistance to help finance their export programs. They can get financing aid from the Export-Import Bank and export credit insurance from the Foreign […]
QUESTION Which of the following is true of exporting? A. Many foreign customers require face-to-face negotiations on their home turf. B. Large firms tend to wait for the world to come to them, rather than going out into the world to seek opportunities. C. Exporters have the advantage of reduced paperwork and fewer formalities. D. […]
QUESTION In international commerce, time drafts are negotiable instruments Indicate whether the statement is true or false. ANSWER TRUE Time drafts are negotiable instruments; that is, once the draft is stamped with an acceptance, the maker can sell the draft to an investor at a discount from its face value
QUESTION In international commerce, a sight draft allows for a delay in payment Indicate whether the statement is true or false. ANSWER FALSE Drafts fall into two categories, sight drafts and time drafts. A time draft allows for a delay in payment.
