QUIZ ON CHAPTER 5

Two types of lease

• services lease

• operating lease

• insurance lease

• financial lease

_______ is a means of financing that enables exporters to receive immediate cash by selling their medium and long-term receivables—the amount an importer owes the exporter—at a discount through an intermediary. The exporter eliminates risk by making the sale without recourse.

• Factoring

• Advance payment

• Forfeiting

• Leasing

To secure any claims by the party inviting the tender in the event of withdrawal of the tender before its expiry date or if the tender is modified unilaterally.

• Bid Bond

• Advanced Payment

• Performance Bond

• Guarantee for warranty

• Payment gurantee

(a)   is commonly used to finance the purchase of or constructing house, land and other fixed assets

(a)   is a facility granted by a bank under a current account where the customer is allowed to overdraw his account.

Method used by a firm to obtain cash when the available cash balance held by the firm is insufficient to meet current obligations

(a)  

Discounting bill of exchange?

(a)  

Import advance given by the bank to an exporter

• banker acceptance

• trust receipt

• shipping gurantee

• export credit refinancing

Two types of ECR

(a)  

A usance Bill of Exchange drawn by the customer and accepted by a Bank for financing trade transactions payable on a specified future date.

• Letter of credit

• Bill discounting

• Banker acceptance

• Trust receipt