Question 1

Which of the following is an advantage of having a letter of credit?

Accepted Answer

A)  It allows payment for merchandise after its delivery.
B)  It facilitates an exporter to obtain pre-export financing.
C)  It allows an exporter to get a higher price for his or her goods.
D)  It helps exporters incur lower shipping costs.
E)  It does not require the importer to pay any fee.F) B) and E)
G) C) and D)

Question 2

Describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

Accepted Answer

Despite institutional disadvantages,U.S....

Question 3

A firm that enters many markets at once

Accepted Answer

A)  runs the risk of spreading its limited management resources too thin.
B)  becomes established in all the markets.
C)  gets the time to learn about each market.
D)  has fewer export opportunities.
E)  reduces the costs of any subsequent failure.F) B) and E)
G) A) and B)

Question 4

Which of the following is a drawback of a countertrade agreement?

Accepted Answer

A)  It fails to give firms a way to finance an export deal.
B)  It requires an in-house trading department to be maintained,which can be expensive and time-consuming.
C)  It is detrimental to the economy of the importing country.
D)  Developing nations may have trouble raising the foreign exchange necessary to pay for imports.
E)  It is not an acceptable means of trading in most developing countries.F) C) and E)
G) B) and C)

Question 5

The Forlan Group is a firm that acts as an export marketing department for client firms.As an export specialist,The Forlan Group is a(n)

Accepted Answer

A)  export management company.
B)  export-import firm.
C)  foreign direct investment management firm.
D)  strategy management company.
E)  association of export companies.F) A) and B)
G) A) and C)

Question 6

Johnson Goods,a U.S.company is exporting to Watanabe Trading,a Japanese importer.The two parties agree on a draft,but Johnson Goods wants it to be a draft that is payable on presentation to Watanabe Trading.Johnson Goods is asking for a(n)

Accepted Answer

A)  bill of lading.
B)  sight draft.
C)  letter of credit.
D)  time draft.
E)  offset.F) All of the above
G) B) and E)

Question 7

The Export-Import Bank provides financing aid to prospective U.S.exporters.

Accepted Answer

A) True 
 B)False

Question 8

Stacy Morgan Apparel is new to exporting and is worried about not getting paid for its goods.Ally Jones,its CFO,is trying to convince the company CEO that by insisting on a letter of credit,Stacy Morgan Apparel is well covered financially.Which of the following aspects of a letter of credit in international trade should convince the company CEO?

Accepted Answer

A)  No cash deposit or collateral is required from the importer.
B)  The exporter pays the trusted third party (usually a bank) a fee for the service.
C)  It becomes a financial contract between the trusted third party (usually a bank) and the exporter.
D)  It is issued by the exporter at the request of the importer.
E)  The creditworthiness of the importer is irrelevant when issuing a letter of credit.F) D) and E)
G) A) and B)

Question 9

The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets,along with businesses they are in,is called the

Accepted Answer

A)  ELAN list.
B)  "best prospects" list.
C)  "comparison shopping service."
D)  SCORE list.
E)  export management list.F) A) and E)
G) A) and D)

Question 10

It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.

Accepted Answer

A) True 
 B)False

Question 11

Jamal Steel,a rapidly growing small steel company with annual revenues of $8 million is looking to buy a large industrial furnace from Japan that is expected to cost $2 million.The exporter wants Jamal Steel to produce a letter of credit.Jamal Steel's CFO is reluctant to do so.Instead,the CFO wants an order written by the exporter instructing Jamal Steel to pay $2 million at a specified time.In international commerce,what the CFO is asking for is known as a

Accepted Answer

A)  bill of lading.
B)  draft.
C)  letter of credit.
D)  counterpurchase.
E)  buyback.F) B) and E)
G) None of the above

Question 12

A draft,an instrument normally used in international commerce to effect payment,is also known as a letter of credit.

Accepted Answer

A) True 
 B)False

Question 13

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

Accepted Answer

Neophyte exporters tend to underestimate...

Question 14

Which of the following is true of medium-sized and small firms?

Accepted Answer

A)  They are proactive about seeking opportunities for profitable exporting.
B)  They consider exporting only after their domestic market is saturated.
C)  They are not intimidated by the complexities of foreign legal systems.
D)  They have a high degree of familiarity with foreign market opportunities.
E)  They explore foreign markets to see where the opportunities lie for leveraging their technology.F) A) and B)
G) C) and D)

Question 15

In terms of using a third party in international trade,title to the products is given to a bank by the exporter in the form of a document known as a

Accepted Answer

A)  merchandise bill.
B)  bill of lading.
C)  bill of exchange.
D)  draft.
E)  letter of credit.F) A) and B)
G) D) and E)

Question 16

Which of the following is true of counterpurchase?

Accepted Answer

A)  It is the most restrictive countertrade arrangement.
B)  It is a reciprocal buying agreement.
C)  It is the simplest countertrade arrangement.
D)  It uses a specialized third-party trading house.
E)  It is the direct exchange of goods without a cash transaction.F) A) and E)
G) C) and E)

Question 17

When a time draft is presented to a drawee,he or she signifies acceptance of it by

Accepted Answer

A)  delivering the goods immediately.
B)  paying the draft amount immediately.
C)  providing a collateral for the amount specified in the bill.
D)  writing or stamping a notice of acceptance on its face.
E)  selling the draft to an investor at a discount from its face value.F) B) and D)
G) A) and D)

Question 18

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Accepted Answer

A)  switch trade.
B)  offset.
C)  buyback.
D)  arbitrage.
E)  barter.F) A) and B)
G) A) and C)

Question 19

A drawback of countertrade is that

Accepted Answer

A)  it fails to enable firms to finance an export deal.
B)  it is detrimental to the economy of the importing country.
C)  developing nations have trouble raising the foreign exchange necessary to pay for imports.
D)  it does not allow firms to invest in an in-house trading department dedicated to arranging and managing deals.
E)  it may involve the exchange of poor-quality goods that cannot be disposed of profitably.F) A) and B)
G) A) and C)

Question 20

TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period.This is an example of

Accepted Answer

A)  switch trading.
B)  a buyback.
C)  a counterpurchase.
D)  an offset.
E)  barter.F) A) and B)
G) A) and E)

Exam 14: Exporting, Importing, and Countertrade

In terms of using a third party in international trade,title to the products is given to a bank by the exporter in the form of a document known as a

Correct Answer
verified

A firm that enters many markets at once

Correct Answer
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A drawback of countertrade is that

Correct Answer
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Johnson Goods,a U.S.company is exporting to Watanabe Trading,a Japanese importer.The two parties agree on a draft,but Johnson Goods wants it to be a draft that is payable on presentation to Watanabe Trading.Johnson Goods is asking for a(n)

Correct Answer
verified

The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets,along with businesses they are in,is called the

Correct Answer
verified

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Correct Answer
verified

A draft,an instrument normally used in international commerce to effect payment,is also known as a letter of credit.

Correct Answer
verified

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

Correct Answer
verified
Neophyte exporters tend to underestimate...
View Answer

It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.

Correct Answer
verified

Which of the following is true of medium-sized and small firms?

Correct Answer
verified

Correct Answer
verified

The Forlan Group is a firm that acts as an export marketing department for client firms.As an export specialist,The Forlan Group is a(n)

Correct Answer
verified

Describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

Correct Answer
verified
Despite institutional disadvantages,U.S....
View Answer

Which of the following is a drawback of a countertrade agreement?

Correct Answer
verified

Which of the following is an advantage of having a letter of credit?

Correct Answer
verified

Which of the following is true of counterpurchase?

Correct Answer
verified

TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period.This is an example of

Correct Answer
verified

The Export-Import Bank provides financing aid to prospective U.S.exporters.

Correct Answer
verified

Correct Answer
verified

When a time draft is presented to a drawee,he or she signifies acceptance of it by

Correct Answer
verified

Exam 14: Exporting, Importing, and Countertrade

In terms of using a third party in international trade,title to the products is given to a bank by the exporter in the form of a document known as a

Correct AnswerverifiedShow Answer

A firm that enters many markets at once

Correct AnswerverifiedShow Answer

A drawback of countertrade is that

Correct AnswerverifiedShow Answer

Johnson Goods,a U.S.company is exporting to Watanabe Trading,a Japanese importer.The two parties agree on a draft,but Johnson Goods wants it to be a draft that is payable on presentation to Watanabe Trading.Johnson Goods is asking for a(n)

Correct AnswerverifiedShow Answer

The list provided by the International Trade Administration to a potential exporter with the names and addresses of potential distributors in foreign markets,along with businesses they are in,is called the

Correct AnswerverifiedShow Answer

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Correct AnswerverifiedShow Answer

A draft,an instrument normally used in international commerce to effect payment,is also known as a letter of credit.

Correct AnswerverifiedShow Answer

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

Correct AnswerverifiedNeophyte exporters tend to underestimate...View AnswerShow Answer

It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.

Correct AnswerverifiedShow Answer

Which of the following is true of medium-sized and small firms?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Forlan Group is a firm that acts as an export marketing department for client firms.As an export specialist,The Forlan Group is a(n)

Correct AnswerverifiedShow Answer

Describe the role of the U.S.Department of Commerce in helping U.S.firms increase their knowledge of export opportunities.

Correct AnswerverifiedDespite institutional disadvantages,U.S....View AnswerShow Answer

Which of the following is a drawback of a countertrade agreement?

Correct AnswerverifiedShow Answer

Which of the following is an advantage of having a letter of credit?

Correct AnswerverifiedShow Answer

Which of the following is true of counterpurchase?

Correct AnswerverifiedShow Answer

TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period.This is an example of

Correct AnswerverifiedShow Answer

The Export-Import Bank provides financing aid to prospective U.S.exporters.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a time draft is presented to a drawee,he or she signifies acceptance of it by

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Neophyte exporters tend to underestimate...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Despite institutional disadvantages,U.S....
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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