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International Payment - Review for Mid-Term Exam Flashcards | StudBud
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International Payment - Review for Mid-Term Exam
International Payment - Review for Mid-Term Exam
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Questions
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Answers
1
Managing the risk through reduction which means to lessen negative impacts of unknown risk by buying insurance policy
Hedging
Mitigation
Bonds and stock trading
Investing in Real Estate
2
Multimodal Transport (All modes) terms are...
FAS, FOB, CFR, CIF
FCA, EXW, CPT, CIP, DAP, DAT, DDP
EXW, FAS, CPT, DAT, CIP, DAP, DDP
EXW, FAC, CPT, FOB, DDP, DAT, CIP
3
Each Incoterms rule specifies...
The point in the journey where risk transfers
All terms and conditions of International Trade
The Obligation of each party, seller and buyer
2 and 3
4
What responsibilities are be borne by buyer in DPU?
Paying the inland shipping in origin
Unloading and all charges after unloading
All charges after unloading (Import Duty, Taxes, etc)
Unloading and Loading of cargo in terminal
5
Objectives of International Trade are .....
All
Reduced vulnerability and New knowledge and experience
Higher profits and Global and local competitiveness
Extend the product’s life cycle
6
What are the terms of group "D"?
DAP, DDP, DDU, DPU
DPU, DAP, DDP
DPU DAP, DDU
All
7
Exporter fully exposed to any credit risk associated with the customer until payment is received. It is .....
Open Account
Drat (Sight)
COD
On Consignment
8
Under term of FCA, What are the responsibilities of Seller?
Packaging, Loading, Inland Freight, Terminal Charges
Packaging, Loading, Inland Freight, and Unloading
Packaging, Loading, Inland Freight charges
Packaging, Loading, and Unloading
9
Which group are the methods of payment?
Documentary Collection, Letter of Credit (L/C), Closed Account, Consignment
L/C, Cash On Contract, On Consignment, Advance Payment
Draft (Sight and Time), Open Account, Confirmed L/C, Cash On Delivery (COD)
COD, Letter of Credit, Documentary Collection (Loan), Open Account
10
Payment does not guarantee the shipment or delivery of the goods from the seller.
Cash In Advance
Cash On Delivery
Draft (Time)
Letter of Credit (L/C)
11
Importer Bank guarantees that the buyer will pay the agreed amount of money to the seller within a specified time
COD
Draft (Time)
Letter of Credit (L/C )
Draft (Time)
12
............. is the
best
method of payment in terms of zero risk for buyer/Importer.
Letter of Credit
On Consignment
Cash On Delivery
Draft or Documentary Collection
13
What are the terms in order of max. to min. cost for seller?
EXW, DDP, CIF, CFR
FAS, FCA, EXW, CIF
CFR, CIF, DPU, DDP
DDP, DAP, DPU, EXW
14
.....is risk management to transfer the risk not by buying insurance but through investing in high-yield instrument
Mitigation
Life insurance package
Insurance
Hedging
15
Incoterms stands for?
Internal Corporation Terms
International Corporation Terms
Internal Commercial Terms
International Commercial Terms
16
Environmental, internal and market variables of target market are .....
All
Commissions, training charges
Business travel, Market research and credit checks
Currency exchange rates and fluctuations
17
No bank has guaranteed that Exporter get paid: Banks act as intermediaries between the buyer and seller. This is .......
Open Account
Letter of Credit (L/C)
Cash On Delivery
Documentary Collection/Draft
18
............. is the best method of payment in terms of zero risk for seller/exporter.
Cash In Advance
Cash on Delivery (COD)
On Consignment
Letter of Credit (L/C)
19
Exporter is in fact financing the transaction for the buyer. This method of payment is called ............... .
Letter of Credit (L/C)
Draft (Sight)
Open Account
On Consignment
20
What are the terms in order of minimum to maximum responsibility for buyer?
DDP, DAP, DPU, EXW
DPU, CFR,FOB, DDP
EXW, FCA, FAS, FOB
FOB, CIF, DDP, CFR
21
The THIRD PARTY is paid by Exporter a certain fees ....
Letter of Credit (L/C)
Draft (Time)
Cash on Delivery
Confirmed L/C
22
What are the 4 elements in following L/C flowchart?
Advising Bank- Issuing Bank - Importer -Exporter
Importer - Exporter - Advising - Issuing
Issuing Bank- Advising Bank-Importer -Exporter
Exporter -Importer -
23
What are the responsibilities of Seller in FOB?
Inland freight cost, customs clearance, Insurance
Risk of Maritime transportation till delivery to destination
All
Inland freight cost, Customs clearance, Loading on Board
24
Three ways of indirect Export are.......
Export Houses, Confirming Houses, Buyer offices
Confirming Houses, Import Houses, Buyer Offices
None
Buyer offices ,Nonconforming Houses, Import Houses
25
payment should be made immediately upon receipt of the shipping documents by the buyer's bank. The seller & buyer agreed
Documentary Collection (Sight)
Letter of Credit (CONFIRMED)
Documentary Collection (Time)
Letter of Credit (L/C)
26
The seller has shipped goods & provided credit terms to the buyer, allowing the merchandise be released before payment
Open Account (30, 60, 90.. days)
Time Drafts
Letter of Credit (L/C)
Sight Draft
27
Monomodal Transport
(Sea and Inland Waterway)
terms are...
FCA, FAS, FOB, CFR
FCA, FOB, CIF, CFR
FAS, FOB, CFR, CIF
CPT, CIP, DAP, DAT
28
Incoterms is ...
Mandatory, and is the international Business language
Optional, and is international Business Language
Mandatory, and is the terms and conditions of contract
Optional, and is the terms and conditions of contract
29
Keeping price low to attract more customers, discourage competitors, gain market share is....... strategy
Penetration
Skimming
Static
Flexible
30
3 pillars in international trade are ...
Foreign currency, Import/Export, and HS
Incoterms, Foreign currency, and HS
Incoterms, Documents, and Foreign currency
Documents, Rules of Origin, and Foreign currency
31
Who is responsible for Packaging and Customs Clearance respectively of in term of DDP?
Seller - Buyer
Seller - Seller
Buyer -Buyer
Buyer -Seller
32
Who has to pay the Maritime transportation cost and Insurance in CFR?
Seller - Seller
Buyer - Buyer
seller -Buyer
Buyer - Seller
33
What are the 4 main pricing strategies?
Static, Flexible, Skimming, Medium
Market, Penetration, Flexible, High price
Flexible, Skimming, Static, Penetration
None
34
Major additional costs in international Trade ....
All
Finance (hedging, insuring, mitigating, etc)
Exchange Rate Variation and Incoterm usage
Export/Import Documentation
35
Which one(s) of risk management tool is/are involving third party?
None
Hedging
Mitigation
Mitigation / Hedging
