1.

Which of the following _incorrectly_ states the role of banks in import/export transactions involving a letter of credit (L/C)?

a.

The importer's bank is neither advising nor confirming bank.

b.

The importer's bank is the advising and/or confirming bank.

c.

The importer's bank is the advising, confirming, and issuing bank.

d.

The exporter's bank is the advising and/or confirming bank.

2.

Businesses that engage in international trade can mitigate commercial risk and protect their interests through various forms of insurance, such as which of the following?

a.

Cargo insurance, political risk insurance, foreign accounts receivable insurance

b.

Commercial umbrella insurance, cargo insurance, foreign accounts receivable insurance

c.

Employment practices liability insurance, commercial umbrella insurance, business income insurance

d.

Business income insurance, political risk insurance, foreign accounts receivable insurance

3.

Which of the following is the approach used when a company adds the Cost of Goods Sold (COGS) to Selling, General and Administrative (SG&A) expenses, and an additional profit margin, before adding all additional costs associated with an export sale?

a.

Marginal cost pricing approach

b.

Fixed cost pricing approach

c.

Cost-plus approach to pricing

d.

Penetration pricing approach

4.

Which of the following items are included in a typical commercial risk assessment checklist?

a.

Background information of the foreign importer, ISO inventory review, commercial credit report

b.

Background information of the foreign importer, supplier references, letter of credit

c.

Background information of the foreign importer, supplier references, commercial credit report

d.

Formal letter of introduction, supplier references, commercial credit report