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.
QUESTION The mission of the Foreign Credit Insurance Association is to provide financing aid that will facilitate exports, imports, and the exchange of commodities between the United States and other countries Indicate whether the statement is true or false. ANSWER FALSE It is the mission of the Export-Import Bank, often referred to as Ex-Im […]
QUESTION Offset refers to the use of a specialized third-party trading house in a countertrade arrangement Indicate whether the statement is true or false. ANSWER FALSE An offset, a type of countertrade, is similar to a counterpurchase insofar as one party agrees to purchase goods and services with a specified percentage of the proceeds […]
QUESTION Export credit insurance protects an exporter against the possibility of a foreign importer’s default on payment when there is a lack of a letter of credit Indicate whether the statement is true or false. ANSWER TRUE The lack of a letter of credit exposes an exporter to the risk that a foreign importer […]
