Question 1

When a time draft is drawn on and accepted by a bank, it is known as a

Accepted Answer

A)   trade acceptance.
B)   banker's check.
C)   banker's acceptance.
D)   bill of lading.
E)   letter of credit.F) C) and E)
G) B) and D)

Question 2

Without a letter of credit, an exporter faces the risk that the foreign importer will not make payment.

Accepted Answer

A) True 
 B)False

Question 3

When Carlton Company Inc. exported elevator component parts to a company in Taiwan, it allowed the company 90 days to pay for the parts. This is an example of a(n)

Accepted Answer

A)   sight draft.
B)   time draft.
C)   bill of lading.
D)   counterpurchase.
E)   offset.F) C) and D)
G) A) and C)

Question 4

Miami WindSails wants to export but, as a small family business, is cautious, particularly with respect to financial risk. What is a strategic step that you would advise Miami WindSails to take to increase its probability of exporting successfully?

Accepted Answer

A)   avoid the use of export management companies to contain costs
B)   enter several markets simultaneously to hedge risk
C)   enter a foreign market on a small scale
D)   wait for export opportunities to come to them
E)   avoid recruitment of local personnelF) All of the above
G) C) and D)

Question 5

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer, it serves as a

Accepted Answer

A)   document of title.
B)   contract.
C)   receipt.
D)   time draft.
E)   collateral.F) A) and B)
G) C) and D)

Question 6

When a time draft is drawn on and accepted by a business firm, it is known as a(n)

Accepted Answer

A)   trade acceptance.
B)   in-transit bill.
C)   banker's acceptance.
D)   bill of lading.
E)   letter of credit.F) D) and E)
G) A) and B)

Question 7

The government organization that employs 76 district international trade officers and 10 regional international trade officers throughout the United States as well as a 10-person international trade staff in Washington, D.C., to help to help potential exporters is the

Accepted Answer

A)   Federal Trade Commission.
B)   U.S. Commercial Service.
C)   International Trade Administration.
D)   Small Business Administration.
E)   sogo shosha.F) A) and E)
G) A) and B)

Question 8

An exporter might have to forgo a letter of credit when

Accepted Answer

A)   competing exporters also require letters of credit.
B)   the importer is facing stiff competition from other importers.
C)   the exporter is a dominant player in a noncompetitive market.
D)   the importer is in a strong bargaining position.
E)   he or she knows that the importer will default on payment.F) A) and D)
G) D) and E)

Question 9

The Small Business Administration oversees almost 11,500 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses through its program known as the

Accepted Answer

A)   Export Legal Assistance Network.
B)   Service Corps of Retired Executives.
C)   International Trade Veteran's Group.
D)   Network of Foreign Trade Executives.
E)   Export Management Company.F) D) and E)
G) A) and B)

Question 10

The function of sogo shosha in Japan is to

Accepted Answer

A)   proactively and continuously seek export opportunities for their affiliated companies.
B)   exclusively serve the largest and most prestigious companies in Japan.
C)   have offices concentrated in the business district of Tokyo.
D)   monopolize the export market in the country.
E)   consider export only when there is excess production at home.F) A) and E)
G) All of the above

Question 11

Explain the difference between a sight draft and a time draft.

Accepted Answer

A sight draft is payable on presentation...

Question 12

The CORE tool is used by all-sized companies to determine a company's readiness to export a product.

Accepted Answer

A) True 
 B)False

Question 13

A bill of lading verifies to the exporter that his or her company is guaranteed payment and, as a result, the exporter will ship the products.

Accepted Answer

A) True 
 B)False

Question 14

Countertrade is a form of

Accepted Answer

A)   licensing.
B)   dumping.
C)   bartering.
D)   brokering.
E)   franchisingF) A) and C)
G) All of the above

Question 15

Financing aid that will facilitate exports, imports, and the exchange of commodities between the United States and other countries is provided by the

Accepted Answer

A)   International Monetary Fund.
B)   World Bank.
C)   Overseas Commercial Service.
D)   Ex-Im Bank.
E)   Export Credit Insurance Association.F) A) and B)
G) A) and C)

Question 16

Briefly describe the different types of countertrade arrangements.

Accepted Answer

The five distinct types of countertrade ...

Question 17

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 18

Explain why a company would use export credit insurance.

Accepted Answer

Exporters clearly prefer to get letters ...

Question 19

Most small firms actively seek opportunities for exporting rather than wait for demand from another country.

Accepted Answer

A) True 
 B)False

Question 20

A company would hire a freight forwarder if it wanted to minimize shipping costs and combine many smaller shipments into one large shipment.

Accepted Answer

A) True 
 B)False

Exam 14: Exporting, Importing, and Countertrade

The function of sogo shosha in Japan is to

Correct AnswerverifiedShow Answer

A drawback of countertrade is that

Correct AnswerverifiedShow Answer

Most small firms actively seek opportunities for exporting rather than wait for demand from another country.

Correct AnswerverifiedShow Answer

When a time draft is drawn on and accepted by a business firm, it is known as a(n)

Correct AnswerverifiedShow Answer

Without a letter of credit, an exporter faces the risk that the foreign importer will not make payment.

Correct AnswerverifiedShow Answer

Explain the difference between a sight draft and a time draft.

Correct AnswerverifiedA sight draft is payable on presentation...View AnswerShow Answer

The CORE tool is used by all-sized companies to determine a company's readiness to export a product.

Correct AnswerverifiedShow Answer

Financing aid that will facilitate exports, imports, and the exchange of commodities between the United States and other countries is provided by the

Correct AnswerverifiedShow Answer

A company would hire a freight forwarder if it wanted to minimize shipping costs and combine many smaller shipments into one large shipment.

Correct AnswerverifiedShow Answer

When Carlton Company Inc. exported elevator component parts to a company in Taiwan, it allowed the company 90 days to pay for the parts. This is an example of a(n)

Correct AnswerverifiedShow Answer

When a time draft is drawn on and accepted by a bank, it is known as a

Correct AnswerverifiedShow Answer

A bill of lading verifies to the exporter that his or her company is guaranteed payment and, as a result, the exporter will ship the products.

Correct AnswerverifiedShow Answer

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer, it serves as a

Correct AnswerverifiedShow Answer

Explain why a company would use export credit insurance.

Correct AnswerverifiedExporters clearly prefer to get letters ...View AnswerShow Answer

Miami WindSails wants to export but, as a small family business, is cautious, particularly with respect to financial risk. What is a strategic step that you would advise Miami WindSails to take to increase its probability of exporting successfully?

Correct AnswerverifiedShow Answer

Countertrade is a form of

Correct AnswerverifiedShow Answer

An exporter might have to forgo a letter of credit when

Correct AnswerverifiedShow Answer

The Small Business Administration oversees almost 11,500 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses through its program known as the

Correct AnswerverifiedShow Answer

The government organization that employs 76 district international trade officers and 10 regional international trade officers throughout the United States as well as a 10-person international trade staff in Washington, D.C., to help to help potential exporters is the

Correct AnswerverifiedShow Answer

Briefly describe the different types of countertrade arrangements.

Correct AnswerverifiedThe five distinct types of countertrade ...View AnswerShow Answer

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A sight draft is payable on presentation...
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Exporters clearly prefer to get letters ...
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The five distinct types of countertrade ...
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