1. A Canadian importer has been asked by his trade partner(exporter) to do the payment in advance. what would be your suggestion to the importer to cover the risk of one shipment by the exporter?

• ask for a bid guarantee from the exporter equal to the amount of transaction.
• ask for a standby l/c from the exporter equal to the amount of the transaction.
• ask for a bank guarantee from the exporter equal to the amount of transaction.
• both A and B
• both B&C
• all of the above

2.on a clean payment, the exporter should present the shipping documents to the________

• Remitting bank
• issuing bank
• nominated bank
• presenting bank
• none of the above

3. in the process of letter of credit___ will issue the credit instruction.

• Importer
• issuing bank
• beneficiary
• exporter
• both A and D
• both C&D
• 4on the straight credit the IIREVOCABLE L/C is advised to THE beneficiary by____
• a nominated bank
• an issuing bank
• an advising bank
• a negotiating bank

5. A Canadian project management company has conducted a business contract the government of an African country to design and build a petrochemical plant, both parties have agreed to use documentary L/C as the method of payment. the Canadian PM company ask a part of total amount of project to be paid To them in advance. the African officials agreed to pay partial amount of L/C but THEY prefer to do all the payments under one L/C what type of L/C you will suggest to be used for this transaction?

• back to back L/C
• Evergreen clause L/C
• red clause L/C
• green CLAUSE L/C

6. Mary is working in a startup company that has recently received a letter of interest from a ,company located in a country that is controlled by military forces after a COUP. what would be the best type of L/C marY Can suggest to be used for selling business to this client?

• confirmed revokable LC
• stand by L/C
• confirmed IRREVOCABLE L/C
• time L/C
• both C&D

7. which of the following variance L/CS can be transferred to the third beneficiary?

• red clause L/C
• back to back L/C
• transferable L/C
• Evergreen L/C
• none of the above

8. an Australian read supplier is doing business with one of its Asian clients. the client insists ON L/C as the method of payment and the Australian supplier agrees the only problem that the supplier has is that he cannot ship the whole quantity in one shipment and he needs at least six months to ship the whole shipment but he can arrange for partial shipment every month until he ships the last shipment. both parties are seeking to find the best type of L/C that means this requirement. in your opinion what would be their best option to be used?

• time revolving L/C
• time transferable L/C
• value transferable L/C
• value revolving L/C
• both A and D (time and value revolving)

9. all of the following are unique aspects of a transferable L/C theme for exporters and suppliers except?

• THE L/C is transferable only if it says it is
• there can be multiple second beneficiaries of the L/C does not allow partial shipments
• the L/C can be transferred only once
• the first beneficiary may choose not to advise all requested amendments to the second beneficiary
• none of the above

10. in transferrable L/C which of the following may be reduced or curtailed in the transfer to the second beneficiary?

• the amount of the credit
• the unit price of the products/goodS There in
• the expiry date
• the last day for shipment or shipment.
• All of the above

11. put the following steps for the issuance of a letter of credit and the correct order

• the issuing bank forwards the letter of credit to the advising bank
• the advising bank advises the exporter of the received letter of credit
• the importer instructs its banks to issue a letter of credit in favor of the exporteR with pre negotiated terms
• the exporter and importers sign a contract with the requirement to issue a letter of credit
• 4312
• 2314
• 2134
• 1234

12. rWANDA import Inc. signed a contract with Zimbabwe export Inc. for the purchase of drilling equipment used in infrastructure development. The RWANDAN company is interested in obtaining the product prior to payment but the Zimbabwean company wants to receive the payment upfront to minimize their risk of non collecting. what is the recommended rate instrument for both companies to use?

• open account
• transferable letter of credit
• letter of credit and letter of guarantee
• corporate letter of credit

13. a Canadian company is negotiating with the Chinese company to lambER, the Chinese buyer is insisting to pay the amount of this business with Chinese RMB and and the Canadian company is trying to use a strategy to protect itself from currency fluctuations what would you recommend them?

• letter of credit
• risk retention
• forward market hedges
• spot market
• bond market hedges

14.in an option market hedging there is the option to sell or purchase certain currencies at a certain exchange rate either on or before a certain date. the exchange rate that is agreed upon is called THE _____

• currency Leverage

15. in which of the following method of payments risk to the exporteR completely relies ON IMPORTERS payment schedule?

• IRrevokable documentary credit
• siGHT documentary collection
• consignment
• open account
• both C&D -- may be
• none of the above

16. the most appropriate pricing strategy for a company in a market with relatively stable demand and little competition is?

• penetration pricing
• static pricing
• cost based pricing
• competitive pricing

1. which of the following is correct statement about standby letter of credit?

17. golfing inC. assembles golf carts that are used on GOLF course as well as other touristic locations such as resorts and beaches. in recent years golfing INC. has received multiple inquiries from companies based in Cuba for the purchase of their product. in consideration of the contract golfing Inc has requested payments to be made by a letter of credit. furthermore given the size of the contract golfing inCS supplier is seeking a guarantee of future payments. which of the following will be an idol type of letter of credit Golfing Inc should ask for?

• transferable letter of credit
• revolving letter of credit
• RED CLAUSE letter of credit
• confirm letter of credit

18. Mirabel productions is a newcomer to a saturated multimedia market(there are 53 existing multimedia forms in a greater metropolitan area in which it is based). the company provides very similar services to its competitors and is resolute about opening its doors as soon as possible. pricing has not been established for any services. what be the most suitable pricing strategy for Mirabel in sUCH circumstances?

• cost plus pricing
• competitive pricing
• premium pricing
• penetration pricing

19. I dream2export Inc is a known manufacturer of Eli D lights used for signal lights in its country. in recent years the demand for such products has grown significantly in the foreign market. I dream2 export inC has lost to its foreign competition due to limited appetite for taking on foreign market risk and limited working capital. recently I dream 2 export INC has been introduced to their ECA via their bank and are looking at various solutions to help mitigate foreign market risk. in particular the company is considering accounts receivable insurance to have secured the collection of receivables. which of the following risk is covered under this insurance policy?

• commercial disputes
• currency fluctuation
• damage to merchandise in transport
• insolvency

20. in a term documentary collection_

• the draft is PAYABLE to the drawEE by the remitting bank upon acceptance
• the shipping documents will be released to the DRAWEE by presenting bank upon acceptance of the draft
• the shipping documents will be released to the drawer by the presenting bank upon acceptance of the Draft
• the draft is payable to the drawer by the remitting bank upon acceptance

21, under which circumstances the back to back l/c is essential?

• if the importer is willing to open a transferable L/C
• if the ultimate seller is willing to disclose its supplier
• if the ultimate seller requires cash or a negotiable L/C
• none of the above

22. which of the following plays a role to verify that the documents received are as required in the collection order and forward them to the importers bank?

• presenting bank
• the remitting bank
• the collecting bank
• the DrAWEE

23. in an IRREvocable confirmed L/C transaction the obligation of the confirming back does not eliminate the obligation of?

• the advising bank
• the issuing bank
• the importer
• both A and B
• both B&C

24. which of the following is the most common risk of doing business in another country?

• political risk
• economic risk
• changing tax rates
• change in the value of a country's currency

25. Which method of payment can highly protect be exported against the credit risk?

• IRrevokable documentary collection
• IRREvocable documentary credit
• open account
• both B&C
• none of the above

26. in a documentary collection the bank or banks handle the documents in accordance with instructions received to?

• open payment and acceptance
• deliver documents against payment and/or against acceptance
• deliver documents on other terms and conditions
• both B&C
• all of the above