Export Import Finance Unit I &Unit II

Long term credit is given for period beyond_____

• 7 Years

• 9 Years

• 5 Years

• 10 Years

The red clause letter of credit is also known as ______

• Standby credit

• Anticipatory credit

• Automatic credit

• Back to Back credit

A letter of credit is opened on behalf of _________

• Exporter customers

• Importer customers

• Any party wishing to make payment abroad

• Third party

Under an acceptance letter of credit, the responsibility of the issuing bank is ________

• Only to accept the bill

• To pay against the bill

• To accept the immediately and also to pay the amount of the bill on its due date

• To get the acceptance of the importer on the bill.

A confirmed letter of credit is one _______

• Confirmed to be attention

• Confirmed by the importer to be correct

• Confirmed by the exporter that he agrees to the conditions

• Confirmed by a bank (other than the opening bank) in the exporter's country

The method of payment where the exporter relies on the undertaking of a bank to pay is --------

• bank guarantee

• letter of credit

• letter of comfort

• letter of understanding

Under advance remittance as a method of payment the credit risk is borne ---------

• The importer.

• The exporter.

• Importer's bank.

• Exporter's bank

Advising of letter of credit will be done by the bank ------

• Only to its customers

• To any person provided the letter of the credit is issued by its correspondent bank

• Free of charge to its customers and for a cost to others

• To any beneficiary and from any issuing bank

The best form of method of payment for an importer would be -------

• Advance remittance

• Letter of credit

• Documents against payment

• Open account

Cash on delivery method is normally used for _____

• Bulk cargo with immediate market

• Slow moving terms

• Small but valuable items sent by post

• Exports to countries with balance of payments problem