Question 1

The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank before final payment by the importer.

Accepted Answer

A) True 
 B)False

Question 2

What is the drawback for the importer in using a letter of credit?

Accepted Answer

A)  The importer loses control over the process of trading.
B)  The system is skewed heavily in favor of the exporter.
C)  It may reduce his ability to borrow funds for other purposes.
D)  The loan must be repaid even before the merchandise has been solD.E) A) and B)
F) C) and D)

Question 3

EMCs normally accept two types of export assignments.One,startup services are performed with the understanding that the EMC will have continuing responsibility for selling the firm's products.Two,they

Accepted Answer

A)  start exporting operations for a firm with the understanding that the firm will take over operations after they are well established.
B)  collect duties on exported products and convert the currency of one country into the currency of another.
C)  serve firms in particular industries and in different areas of the world.
D)  collect duties on exported products and set interest rates charged to foreign investors.E) A) and B)
F) B) and D)

Question 4

A letter of credit is sometimes referred to as a bill of exchange.

Accepted Answer

A) True 
 B)False

Question 5

Exporting is often not an end in itself,but merely a step on the road toward establishment of foreign production.

Accepted Answer

A) True 
 B)False

Question 6

Most novice exporters realize the amount of management resources that have to be dedicated to cultivate business in foreign countries.

Accepted Answer

A) True 
 B)False

Question 7

The letter of credit is issued by a bank at the request of a(n) :

Accepted Answer

A)  exporter.
B)  government.
C)  importer.
D)  shipping company.E) A) and B)
F) None of the above

Question 8

Which of the following is payable on presentation to the drawee?

Accepted Answer

A)  Bill of lading
B)  Sight draft
C)  L/C
D)  Time draftE) C) and D)
F) A) and D)

Question 9

A good EMC has all of the following qualities EXCEPT:

Accepted Answer

A)  a network of contacts in potential markets.
B)  a good knowledge of different business mores.
C)  be fully conversant with the ins and outs of the exporting process and with local business regulations.
D)  a staff comprising English-speaking employees alone.E) None of the above
F) B) and C)

Question 10

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

Accepted Answer

A)  Most of these firms are proactive about seeking opportunities for profitable exporting.
B)  They consider exporting only after domestic markets are saturated.
C)  These firms go out in the world to seek opportunities.
D)  These firms have a high degree of familiarity with the foreign market opportunities.E) A) and B)
F) A) and C)

Question 11

Lack of trust between two parties engaged in international trade is accentuated by:

Accepted Answer

A)  similar preferences as to how the transaction should be configured.
B)  narrowing distance between two parties due to technological advances.
C)  the problems of using an underdeveloped international legal system to enforce contractual obligations.
D)  the possibility of doing business with someone from another country with whom they have been associated for a long time.E) All of the above
F) None of the above

Question 12

In theory,the advantage of EMCs is that they are experienced specialists who can help the neophyte exporter identify opportunities and avoid common pitfalls.

Accepted Answer

A) True 
 B)False

Question 13

According to Don Gallion,president of FCX Systems,finding a good _____ is a critical factor in achieving success in exporting that will keep the firm out of trouble when it comes to customs and what one should and shouldn't do.

Accepted Answer

A)  local representative
B)  home-country financier
C)  location in the host country
D)  local marketE) A) and D)
F) None of the above

Question 14

Within the U.S.Department of Commerce are two organizations dedicated to providing businesses with intelligence and assistance for attacking foreign markets: the Service Corps of Retired Executives (SCORE)and the Export Legal Assistance Network (ELAN).

Accepted Answer

A) True 
 B)False

Question 15

The most restrictive countertrade arrangement is:

Accepted Answer

A)  counterpurchase.
B)  offset.
C)  barter.
D)  switch trading.E) All of the above
F) A) and B)

Question 16

Describe the meaning of export management companies.What are the advantages and drawbacks of using EMCs?

Accepted Answer

An EMC uses export specialists who act a...

Question 17

Albania offered such items as spring water,tomato juice,and chrome ore in exchange for a $60 million fertilizer and methanol complex.Which type of countertrade is this?

Accepted Answer

A)  Offset
B)  Switch trading
C)  Buyback
D)  BarterE) A) and B)
F) A) and C)

Question 18

As a _____,a bill of lading can be used to obtain payment or a written promise of payment before the merchandise is released to the importer.

Accepted Answer

A)  document of title
B)  contract
C)  receipt
D)  time draftE) B) and D)
F) A) and B)

Question 19

Why is lack of trust such a critical issue for firms engaged in international trade? How can firms engaged in trade reduce lack of trust issues?

Accepted Answer

Firms engaged in international trade hav...

Question 20

Sight draft allows for a delay in payment.

Accepted Answer

A) True 
 B)False

Exam 13: Exporting,Importing,and Countertrade

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

Correct AnswerverifiedShow Answer

The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank before final payment by the importer.

Correct AnswerverifiedShow Answer

Lack of trust between two parties engaged in international trade is accentuated by:

Correct AnswerverifiedShow Answer

A letter of credit is sometimes referred to as a bill of exchange.

Correct AnswerverifiedShow Answer

EMCs normally accept two types of export assignments.One,startup services are performed with the understanding that the EMC will have continuing responsibility for selling the firm's products.Two,they

Correct AnswerverifiedShow Answer

As a _____,a bill of lading can be used to obtain payment or a written promise of payment before the merchandise is released to the importer.

Correct AnswerverifiedShow Answer

Which of the following is payable on presentation to the drawee?

Correct AnswerverifiedShow Answer

According to Don Gallion,president of FCX Systems,finding a good _____ is a critical factor in achieving success in exporting that will keep the firm out of trouble when it comes to customs and what one should and shouldn't do.

Correct AnswerverifiedShow Answer

Exporting is often not an end in itself,but merely a step on the road toward establishment of foreign production.

Correct AnswerverifiedShow Answer

The letter of credit is issued by a bank at the request of a(n) :

Correct AnswerverifiedShow Answer

Most novice exporters realize the amount of management resources that have to be dedicated to cultivate business in foreign countries.

Correct AnswerverifiedShow Answer

In theory,the advantage of EMCs is that they are experienced specialists who can help the neophyte exporter identify opportunities and avoid common pitfalls.

Correct AnswerverifiedShow Answer

The most restrictive countertrade arrangement is:

Correct AnswerverifiedShow Answer

Albania offered such items as spring water,tomato juice,and chrome ore in exchange for a $60 million fertilizer and methanol complex.Which type of countertrade is this?

Correct AnswerverifiedShow Answer

Within the U.S.Department of Commerce are two organizations dedicated to providing businesses with intelligence and assistance for attacking foreign markets: the Service Corps of Retired Executives (SCORE)and the Export Legal Assistance Network (ELAN).

Correct AnswerverifiedShow Answer

Why is lack of trust such a critical issue for firms engaged in international trade? How can firms engaged in trade reduce lack of trust issues?

Correct AnswerverifiedFirms engaged in international trade hav...View AnswerShow Answer

A good EMC has all of the following qualities EXCEPT:

Correct AnswerverifiedShow Answer

Sight draft allows for a delay in payment.

Correct AnswerverifiedShow Answer

Describe the meaning of export management companies.What are the advantages and drawbacks of using EMCs?

Correct AnswerverifiedAn EMC uses export specialists who act a...View AnswerShow Answer

What is the drawback for the importer in using a letter of credit?

Correct AnswerverifiedShow Answer

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Firms engaged in international trade hav...
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An EMC uses export specialists who act a...
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