12. Letters of Credit rely heavily on:
    

When are documentary collections ideal compared to Letters of Credit?

Which of the following is true about "Open Accounts" in international trade?

Why are buyers reluctant to prepay for goods in international trade?

To protect both buyers and sellers in a trade, what mechanism can be used?

The primary concern for buyers in international trade is:

Why might a buyer insist on using the local currency for payments?

What method can mitigate foreign exchange risk?

Which payment method offers the highest security for sellers?

What is foreign exchange risk?

What is a forward market hedge?

What is the key benefit of hedging for a seller?

When is the use of a third-country currency most appropriate?

How does an options market hedge differ from a forward market hedge?

What is a key limitation of using the money market hedge?

Which risk arises for buyers using a forward exchange contract?

has the responsibility of preparing and presenting documents in accordance with the terms of the documentary credit or collection.

Banks are authorized to accept documents that have been signed by facsimile, perforated signature, stamp, symbol, or any other mechanical or electronic method.

• A bill of lading is a document issued by to a shipper, signed by the captain, agent, or owner of a vessel, furnishing written evidence regarding receipt of the goods (cargo), the conditions on which transportation is made (contract of carriage), and the engagement to deliver goods at the prescribed port of destination to the lawful holder of the bill of lading.

A straight bill of lading indicates that the shipper will deliver the goods to the consignee. The document itself give title to the goods (negotiable).

A shipper's order bill of lading is a title document to the goods, issued "------" a party, usually the shipper, whose endorsement is required to effect its negotiation.

-- is one which contains notations that specify a shortfall in quantity or deficient condition of the goods and/or packaging. Opposite of clean bill of lading

•  Banks will normally accept the following documents under this title: ocean bill of lading, combined transport bill of lading, short form bill of lading, or received for shipment bill of lading, provided it carries the notation ----

• --bill of lading is a transport document covering port-to-port shipments of goods issued by a party chartering a vessel (as opposed to a named carrier or shipping line).

• The NAFTA (North American Free Trade Agreement) Certificate of Origin is a document prepared by an exporter attesting that the country of origin of goods exported to one of the NAFTA countries is from

-- is a set of uniform rules codifying the interpretation of trade terms defining the rights and obligations of buyers and sellers in international transactions

• The Incoterms® rules defines the ----- of the buyers and sellers in international transactions for the sale of goods (not services).

• RULES FOR ANY MODE OR MODES OF TRANSPORT

• --is the only term under which the seller is responsible for unloading.

1. TIME DRAFTS (also called usance drafts) which are payable at a future fixed (specific) date or determinable (e.g., 30, 60, 90 days) date.

If a time draft is accepted by a bank it is called a

• The accepted draft, when discounted, becomes a negotiable instrument that can be sold in the acceptance market, which is an over-the-counter market of brokers, dealers, and banks.

Bankers acceptances are generally short-term, that is up to

The banks involved in a documentary collection do guarantee payment or assume any credit risk, as they do in documentary credit transactions.

is the written promise of a bank, undertaken on behalf of a buyer, to pay a seller the amount specified in the credit provided the seller complies with the terms and conditions set forth in the credit.

It a fundamental principle of documentary credits is that banks deal in goods and not documents.

• -- describes the procedure for the seller's shipping of the goods, the transfer of documents from the seller to the buyer through the banks, and the transfer of the payment from the buyer to the seller through the banks (settlement).

-- refers to the availability of proceeds (funds) to the beneficiary (seller) after presentation of documents under the credit

In -- credit the buyer accepts the documents and agrees to pay the bank after a set period of time.

Payment under an irrevocable documentary credit is guaranteed by the issuing bank but it still has limitation such as:

If a documentary credit does not contain a confirmation request by the issuing bank, in certain circumstances the possibility exists of confirming the credit by

A "" option gives the buyer the right, but not the obligation, to sell a specified number of foreign currency units to the option seller at a fixed dollar price, up to the option's expiration date.

The buyer wants to make certain that goods ordered are shipped and received in a timely fashion. It a example of?

• In many instances the buyer will not possess sufficient working capital to make an outright cash purchase of goods. It is a example of?

• What if the sale is made, goods shipped and received in good order, and then a revolution occurs?  It is a concerns about?