1. How is an export credit agency best described?

(1) a government agency with practical relevance in traditional banking, and most noted for creating distortions in international trade.

(2) A partner in the support of trade, particulary in higher-risk markets or under longer term transactions.

(3) A private sector irsk insurer operating primarily with a commercial mandate.

(4) A lender of last resort when traditional banks cannot offer assistance in domestic projects.

2. When dealing with letters of credit, the issuing bank is required to guarantee that goods are as specified in the commercial contract. Is this statement true or false?

1) True: The Issuing bank will face economic repercussions through the International Chamber of Commerce(ICC) if shipment are faulty.

2) True: The confiming bank ensures the documentation is completed correctly, and the issuing bank ensures the goods meet the contractual specifications.

3) False: The advising bank must confirm that the correct materials or services are being delivered.

4) False: The banks hold no responsibility to guarantee that shipments are consistent with specifications, unless specifically stated.

3. Which of the following is an appropriate investment strategy that can help manage exchange controls?

1) make investment with a maximum of hard currency and the least possible use of local borrowing.

2) Use loans rather than direct equity investment when supporting a subsidiary in another country.

3) Structure operations such that a subsidiary uses management services of the parent company without paying any royalties.

4) Hold currency in the foreign country for as long as possible rather than repatriating earnings immediately.

4. Some documentary letters of credit allow two successive beneficiaries, whereby the first beneficiary can assign part or whole of the L/C amount to a second beneficiary. What financing tool is this reffering to?

1) Deffered payment letter of credit

2) Back-to-back documentary letter of credit

3) Revolving documentary letter of credit

4) Transferable documentary letter of credit