5. Choose the best answer to each of the following statements. (1) To the exporter, the fastest and safest method of settlement is A. letter of credit B. cash in advance C. open account D. banker's draft (2) To the importer, the fastest and safest method of settlement is A. letter of credit B. cash in advance C. open account D. collection (3) Under a letter of credit, the exporter can receive the payment only when A. he has shipped the goods B. he has presented the documents C. the documents presented comply with the credit terms D. the importer has taken delivery of the goods mot o bokanta (4) Settlement by documentary credit is fair to A. the banks involved B. the trading companies concerned C. the shipping company D. all of the above (5) An additional risk borne by the seller when granting a credit to the buyer is that the latter will not A. accept the bill B. take up the documents C. take delivery of the goods D. make payment at maturity (6) is a compromised method between open account and cash in advance. Chapter 1 Brief Introduction to International Trade 21 C. premises A. letter of guarantee B. remittance C. treasury bill D. documentary collection (7) The trade term FOB means Free on Board (named ). A. port of shipment B. port of destination D. place of destinations (8) Under the trade term , the seller might undertake to clear the goods for import into the buyer's country. A. EXW B. FOB C. DDP D. FAS (9) The trade term CIF should be followed by A. named port of destination B. named port of shipment C. named place of destination D. named place (10) Under the trade term FOB Tokyo, the freight should be A. pre-paid by the exporter B. paid C. payable at destination D. payable at the port of loading (11) Under the trade term the importer undertakes the least obligation. . B. DDP C. DDU D. EXW (12) Under the trade term , the exporter undertakes the least obligation. A. CIP B. DDP C. DDU D. EXW (13) According to Incoterms 2000, there are different trade terms. A. 6 B. 11 C. 14 D. 13 (14) The trade term CPT should be followed by A. named port of destination B. named port of shipment C. named place of destination D. named place (15) The trade term DAF should be followed by A. named port of destination B. named port of shipment C. named place of destination D. named place (16) In the Incoterms, any obligation which does not appear in a particular Incoterms must be the responsibility of the A. bank B. seller C. exporter D. buyer (17) Which of the following is based on commercial credit? A. Letter of credit B. Bank letter of guarantee C. Collection D. Insurance policy (18) In credit transactions, the goods and the documents are sent to the importer A. in different ways B. in different directions C. in the same way D. at one time 22 (19) In documentary collection, after the goods have been shipped, the exporter presents the documents to A. the collecting bank B. the reimbursing bank C. the remitting bank D. the opening bank (20) The instructions for collection are mainly A. those given in the contract B. written on the bill of exchange C. given by the importer D. given by the exporter