1. List the three main types of risk relating to International Trade Finance.
2. In terms of International Trade Finance, the payment option that is most secure for the exporter would be the riskiest for the importer.Beginning with the safest option for the importer, list four payment options.
3. A documentary letter of credit in which an additional, separate and independent payment undertaking is added to that of the issuing bank by another financial institution to provide further security to the exporter is called?
4. Consider the following international transaction scenario: The owners Schnheit, an upscale spa and beauty salon in Germany, met the marketers for a new French skin care line called Serein at a recent industry trade event. Serein products are made and distributed in France, and the owners of Schnheit see an opporutnity to become the only the distributors of the products in Germany. Identify the key elements that should be included in a contract between Schnheit and Serein to protect both companies.
5. An instrument by which a guarantor (usually an insurance company) will guarantee the execution of the exporter's obligations in favor of the importer is called?
6. Explain how the use of letter of credit can secure the position of an exporter in the following situation: A Libyan buyer has expressed interest in purchasing LED lights that will be installed on the runway of new airports. A German company has shown interest in supplying these lights, however is concerned about the financial situation of the buyer as well as the bank.