1. In international trade, an exporter is concerned about being paid and importer wants to be sure to receive the agreed upon quantity and quality of goods. To meet these concerns the common practice is that:

1. The importer pays ahead of time
2. An arrangement is made so the exporter sends the goods and at the same time the importer pay.
3. The two work through an intermediary they both trust, with a bank fulfiling the role.
4. Each party obtains guarantees from its government
5. Each party obtains insurance through the World Bank

2. A gray market:

1. can arise where consumers in a high price country can buy the same good lower price in another country close by.
2. Is an instance of market segmentation breaking down
3. Is always against government regulations and illegal
4. Is the same as a black market
5. Both a ) and b )

3.Which of the following documents does a bank issue at the request of an importer to establish ability and willingness to pay with an exporter?

1. Bill of lading
2. Time draft
3. Letter of credit
4. Bill of exchange