Answer True or False for the following statements:

1.There are some unique costs that the exporters need to consider with international transactions like international travel, long-distance communications, participation in trade fairs and missions abroad, hiring of foreign agents, and the cost of translation if dealing with a foreign language.

A True

B False

2.When entering a new market, a company must assess a foreign importer's creditworthiness or a foreign supplier's business capability including credit and commercial character and financial strength to reduce payment risks.

A True

B False

3.For all financial transactions carried out under the documentary collections method, banks act as intermediaries, and this instrument is typically used in established trading relationships, with stable and lower risk markets.

A True

B False

4.An irrevocable L/C a letter of credit that can be cancelled or amended without agreement of all parties, whereas the revocable L/C is a letter of credit that cannot be cancelled at any time without prior notice to the beneficiary.

A True

B False

5.The open account transaction is one where the exporter ships the goods and expects the buyer to remit payment according to the agreed upon terms. Under this mode of payment, the exporter is fully relying on the creditworthiness of the buyer.

A True

B False

6.International Financial Institutions & Aid Agencies offer financing and risk mitigation programs that facilitate the conduct of international trade by engaging local banks in international trade finance and enhancing trade flows by providing guarantees and offering financing or other risk mitigation solutions to foster increased trade flows and encourage development.

A True

B False

7.A business that has decided to expo! its product or service to a new market or to buy from a new supplier in a different country should assume that the potential transactions will be viable, profitable or provide goods and/ or services at a price and quality that are competitive.

A True

B False

8.A type of Documentary Collection is document against acceptance, where the exporter is paid once shipment has been made and draft is presented to buyer for payment. The buyers bank will not release the shipping document to buyer until buyer has paid the draft.

A True

B False

9.Customized Schedule includes a series of dates that define exactly when payments will be made based on the milestones completed

A True

B False

10. In an international business transaction, the exporter must identify and document all the relevant parties involved in the transaction as well as specify the law that governs the transaction as soon as the contract is signed.

A True

B False

11. The Bill of Exchange is a written and unconditional order signed by the exporter and drawn on the importer, demanding payment of the face value of the draft. It is a negotiable instrument or document guaranteeing the payment of a specific amount of money, either on-demand (sight), or at a set time, whose payer is usually named on the document.

A True

B False

12. Trade finance instruments help importers and exporters structure contracts to maximize cash flow risk while helping build relationships.

A True

B False

13. Prevailing commercial and economic philosophies of the buyer's country, their belief systems and nationalistic tendencies, along with the attitudes towards various regions of the world are some common economic risks faced by an exporter during the international business.

A True

B False

14. While in contract negotiation, the payment method and payment terms must be specified and agreed upon based on the influencing factors like the methods of payment and payment terms, location of the importer, and the supplier Previous business relationships of the two parties.

A True

B False

15. A transaction may prove unrealistic if the cost of entering a market is too low, the competition is intense or the price in the new market is highly competitive. It is also not viable if the resulting sales generate less profit or can barely support the cost of doing business.

A True

B False

16. Conducting business internationally requires planning for foreign exchange rates, varying inflation rates, and applicable laws and regulationsat home and abroad. Market factors to consider include competition, market share, and the purchasing power of potential multinational clients.

A True

B False

17. When using a letter of credit (L/C) as the trade finance instrument, the importer's bank will collect the funds and issue the L/C in favor of the exporter. Once the exporter meets the conditions of delivery and those outlined in the L/C, the exporter will be eligible to receive the payment.

A True

B False

18. Verbal agreements and oral contracts are generally valid and legally binding as long as they are responsible, revocable, conscious, and made in good fate.

A True

B False

19. A Corporate L/C is a letter of credit given by a corporation at the request of the beneficiary without the knowledge or consent of the issuing bank. This confirmation guarantees that the beneficiary or the exporter will be paid regardless of whether the issuing bank fulfils its commitment under the letter of credit.

A True

B False

20. The trade terms in an international business contract should clarify the responsibilities of the exporter and the importer for shipping the goods, responsibility for insurance in transit, title to goods in the transport process, and payment of the loss if the goods cannot be delivered.

A True

B False

21. A bill of shipping is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. It is a document of title, a receipt for shipped goods, and a contract between a carrier and shipper.

A True

B False

22. Documentary Letters of Credit involves detailed verification of documents, including a review of specific elements including the shipment date, description of goods, presentation of various inspection certificates, and the documents of transport like negotiable bills of lading.

A True

B False

23. Letter of Credit is an instrument issued by a bank on behalf of exporter promising to pay the importer upon presentation of shipping documents. The exporter's bank gives a guarantee to the importer's bank to transfer goods to the exporter on its behalf.

A True

B False

24. Time Draft is a type of trade instrument where the exporter instructs the buyer's bank to release the shipping document against acceptance of the draft.

A True

B False

25. For the document against payment method of documentary collection instrument, the exporter has a higher risk than the document against acceptance option. However, the exporter can receive the funds immediately under document against payment option by selling the accepted payment undertaking at a discount - usually to a bank.

A True

B False