IIP301-1,2,3 Review

Role of BUYER / IMPORTER in the Credit Risk?

• Prefers that the seller bear the credit risk and wants to make certain that he receives the goods once he has paid

• Prefers that the buyer bear the credit risk and wants to make certain he receives payment for goods shipped

• Needs funds for production and the period before payment is received, and prefers that the buyer finance the transaction

• Needs funds for payment and during the period before resale of goods, and prefers that the seller finance the transaction

Role of BUYER / IMPORTER in Political and Legal Risks?

• May consider political and legal risks to be significant, especially if the country appears to be unstable by his own standards.

• Needs funds for payment and during the period before resale of goods, and prefers that the seller finance the transaction.

• Considers political risk to be minimal in part because he lives with it every day and understands it.

• Needs funds for production and the period before payment is received, and prefers that the buyer finance the transaction.

Condition of goods is the matter of

• the goods arrive in good (usable or salable)

• goods shipped equals goods received

• certainty of getting paid for the goods sold

• none of the above

Timeliness of the receipt of goods is the matter of:

• Goods are delivered at the border on time.

• Goods are delivered to the buyer on time.

• Goods are shipped from the seller on time.

• Goods are in transit on time according to the shipping plan.

What is the seller wants to make certain that goods shipped equals goods received?

• Quality of goods

• Assurance of delivery and correct count

• Condition of goods

• Timeliness of receipt of goods

Which of the following is NOT the factor in concerns of buyer?

• Assurance of delivery and correct count

• Timeliness of receipt of goods

• Seller as a broker

• Transportation costs and risks

One of the differences in concerns of buyer and seller?

• Currency risk

• Finance the transaction

• Legal risks

• Transportation costs and risks

The payment term has the highest risk for exporter:

• Documentary collections

• Open account

• Cash in advance

• Letter of credits

The payment term is the most commonly used in international transactions:

• Documentary collections

• Open account

• Cash in advance

• Documentary credits

The payment term requires the highest responsibilities of the banks in international transactions:

• Consignment

• Documentary collections

• Letter of credits

• Telegraphic transfer