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What is the difference between a sight draft and a time draft?

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A sight draft is payable on presentation...

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In international commerce,a sight draft allows for a delay in payment.

A) True
B) False

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Briefly describe the different forms of government-backed assistance that help potential U.S.exporters finance their export programs.

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Prospective U.S.exporters can draw on tw...

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Mary Warner,the sales manager for a medium-sized apparel company,is facing a tremendous challenge in convincing her boss to get the company to export.As she reflected on this challenge,she realized that many medium-sized firms like hers are not proactive in seeking export opportunities because


A) they are familiar with the foreign market and do not find it challenging enough.
B) the export market is similar to the home market in terms of legal and business practices.
C) they are intimidated by the complexities and mechanics of exporting to foreign countries.
D) domestic regulations limit their ability to export profitably.
E) they can't recruit managers with the expertise needed to cultivate business in foreign countries.

F) A) and E)
G) A) and D)

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To cater to the growing demand for luxury cars,Terabithia Republic agreed to buy 5,000 cars from MotoSporto Inc.in exchange for 5,000 gallons of oil.Due to a lack of trust,Terabithia decided to make it a one-time-only deal.Which of the following forms of countertrade is the country most likely to use?


A) counterpurchase
B) offset
C) switch trading
D) barter
E) buyback

F) All of the above
G) B) and D)

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Delios Trading is exporting for the first time to Japan and has contracted with Abe Imports in Tokyo for an initial order valued at $110,000.Delios Trading wants Abe Imports to secure a document from a Tokyo bank that would indicate that the bank would pay Delios Trading $110,000 upon presentation of specified documents by the exporter.What is the name of the document that Delios Trading is asking for?


A) bill of lading
B) time draft
C) letter of credit
D) sight draft
E) bill of exchange

F) D) and E)
G) A) and B)

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For an importer,which of the following is a disadvantage of using a letter of credit for international transactions?


A) It results in the importer losing control over the process of trading.
B) It reduces the exporter's level of trust in the importer.
C) It reduces the importer's ability to borrow funds for other purposes.
D) It requires the importer to repay the loan even before the merchandise is sold.
E) It is not issued at the importer's request.

F) A) and B)
G) All of the above

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Countertrade is most likely to be used when


A) the foreign currency is easily convertible.
B) the exporter has a letter of credit.
C) the conventional means of international trade transaction are difficult.
D) there is mutual trust between the exporter and the importer.
E) an export management company is used.

F) B) and C)
G) A) and C)

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German and Japanese firms are relatively more information-disadvantaged than U.S.firms.

A) True
B) False

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Which of the following is a disadvantage of barter as a countertrade arrangement?


A) It is a very complex arrangement.
B) In a barter system,if goods are exchanged simultaneously,one party ends up financing the other.
C) Firms engaged in barter run the risk of having to accept goods they do not want or cannot use.
D) It involves huge cash transactions.
E) It cannot be used in transactions with trading partners who are not creditworthy.

F) A) and B)
G) C) and D)

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Which of the following is a characteristic of a time draft?


A) It has no value given the deferred nature of the document.
B) It is generally not preferred in international transactions.
C) It is a negotiable instrument.
D) It is also known as a bill of lading.
E) It cannot be sold by an exporter.

F) C) and E)
G) None of the above

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A type of countertrade where a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them is called


A) barter.
B) switch trading.
C) offset.
D) buyback.
E) compensation.

F) A) and B)
G) C) and D)

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A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as


A) countertrade.
B) carry trade.
C) free trade.
D) counter sale.
E) countervailing duty.

F) A) and E)
G) A) and C)

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


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

F) None of the above
G) B) and E)

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


A) sogo shosha.
B) World Bank.
C) Overseas Commercial Service.
D) Ex-Im Bank.
E) Export Credit Insurance Association.

F) A) and D)
G) C) and D)

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Once accepted by the drawee,a time draft becomes a(n)


A) asset for the drawee.
B) in-transit bill.
C) promise to pay by the accepting party.
D) bill of lading.
E) letter of credit.

F) All of the above
G) B) and D)

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Export credit insurance protects an exporter against the possibility of a foreign importer's default on payment when there is a lack of a letter of credit.

A) True
B) False

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An export credit insurance is necessary when the exporter


A) is exposed to the risk that the importer may default on payment.
B) is dealing in a country that has a nonconvertible currency.
C) is unable to obtain any pre-export financing.
D) has received a letter of credit from the importer's bank.
E) has to enter a barterlike agreement.

F) A) and B)
G) A) and C)

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The sogo shosha of Japan


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) have monopolized the export market in the country.
E) consider export only when there is excess production at home.

F) A) and D)
G) A) and C)

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What is countertrade? When can it be used?

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Countertrade is an alternative means of ...

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