Practice Questions-International Financial Management Jeff Madura- Ch19-21
7 views 0 purchase
Course
Global Finance
Institution
Far Eastern University
Book
International Financial Management
This file includes practice questions for International Financial Management Jeff Madura- Ch19-21 inclusive of True or False and Multiple Choice Questions.
practice questions international financial management jeff madura ch19 21
Connected book
Book Title:
Author(s):
Edition:
ISBN:
Edition:
More summaries for
Test Bank - International Financial Management, 13th Edition (Madura, 2018), All Chapter 1-21
Test Bank in Conjunction with International Financial Management,Madura,13e
Ace Your Exams with the [International Financial Management,Madura,13e] 2023-2024 Test Bank
All for this textbook (12)
Written for
Far Eastern University
Global Finance
All documents for this subject (5)
Seller
Follow
GelC
Reviews received
Content preview
Chapter 19
Financing International Trade
1. Which of the following is a reason why commercial banks can facilitate international
trade?
A) The exporter may not wish to accept credit risk of the importer.
B) The government may impose exchange contracts that prevent payment by the
importer to the exporter.
C) The exporter may need financing until payment for the goods is received.
D) All of the above
ANSWER: D
2. Consider an exporter that sells its accounts receivables off to another firm that
becomes responsible for obtaining cash from the various importers. This reflects:
A) accounts receivable financing.
B) consignment.
C) factoring.
D) a letter of credit.
ANSWER: C
3. Consider a bank that acknowledges that it will make payments on behalf of a beer
importer after the beer is delivered to the importer. This reflects:
A) accounts receivable financing.
B) forfaiting.
C) factoring.
D) a letter of credit.
ANSWER: D
4. Consider an importer that issues a promissory note to pay for the imported capital
goods over a period of five years. The notes are extended to an exporter who sells
them at a discount to a bank. This reflects:
A) accounts receivable financing.
B) forfaiting.
C) factoring.
D) a letter of credit.
ANSWER: B
572
,5. Consider an exporter that is willing to send goods to the importer without a
guaranteed payment by the bank. The bank provides a loan to the exporter that is
backed by the value of the exported goods. This reflects:
A) accounts receivable financing.
B) forfaiting.
C) factoring.
D) a letter of credit.
ANSWER: A
6. The all-in-rate a bank charges its customer(s) for accepting drafts includes both the
discount rate and the acceptance commission.
A) true.
B) false.
ANSWER: A
7. MNCs can use _________ to sell their existing accounts receivable as a means of
obtaining cash.
A) factoring
B) a bill of lading
C) a banker’s acceptance
D) a letter of credit
ANSWER: A
8. __________ was established in 1934 with the intention to facilitate Soviet-American
trade.
A) Domestic International Sales Corporation (DISC)
B) Private Export Funding Corporation (PEFCO)
C) Export-Import Bank
D) Foreign Credit Insurance Association (FCIA)
ANSWER: C
9. A __________ provides a summary of freight charges and conveys title to the
merchandise.
A) letter of credit
B) banker’s acceptance
C) bill of lading
D) bill of exchange
ANSWER: C
,10. According to the text, international trade activity has generally __________ over
time. This should cause the popularity of trade finance techniques to ___________
over time.
A) increased; increase
B) increased; decrease
C) decreased; increase
D) decreased; decrease
ANSWER: A
11. Which of the following payment terms provides the supplier with the greatest degree
of protection?
A) letters of credit.
B) consignment.
C) prepayment.
D) drafts (sight/time).
ANSWER: C
12. With _______, the exporter ships the goods to the importer while still retaining
actual title to the merchandise.
A) a letter of credit arrangement
B) an open account arrangement
C) a draft arrangement
D) a consignment arrangement
ANSWER: D
13. With _______, a bank purchases a receivable without recourse to the exporter.
A) accounts receivable financing
B) factoring
C) a banker’s acceptance
D) a letter of credit
ANSWER: B
14. In _______, a bank arranges to fund a loan to pay the exporter instead of charging
the importer’s account immediately.
A) refinancing of a sight letter of credit
B) a banker’s acceptance
C) a short-term bank loan
D) accounts receivable financing
ANSWER: A
, 15. A bill of exchange requesting the bank to pay the face amount upon presentation
of documents is a:
A) banker’s acceptance.
B) time draft.
C) letter of credit.
D) sight draft.
ANSWER: D
16. A bill of exchange requesting the bank to pay the face amount at a future date is a:
A) banker’s acceptance.
B) time draft.
C) letter of credit.
D) sight draft.
ANSWER: B
17. An exchange of goods between two parties under two distinct contracts expressed
in monetary terms is:
A) compensation.
B) counterpurchase.
C) factoring.
D) accounts receivable financing.
ANSWER: B
18. Which of the following is not a program of the Export-Import Bank of the U.S.?
A) working capital guarantee program.
B) project finance loan program.
C) direct loan program.
D) the foreign sales corporation program.
ANSWER: D
19. Who bears the payment risk in a letter of credit?
A) the exporter.
B) the importer.
C) the issuing bank.
D) both the exporter and importer.
ANSWER: C
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller GelC. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.49. You're not tied to anything after your purchase.
