1. A confirmed letter of credit

a. eliminates sovereign risk for the seller

b. is like a registered letter

c. covers foreign exchange exposure

d. none of the above

2. a Forfait transaction

a. is a letter of credit sale

b. is export credit insurance

c. is a sale without recourse

d. is a draf

3. Changes in future operating cash flows caused by exchange rate movements is called

a. natural hedging

b. transaction exposure

c. operating exposure

d. none of the above

4. Countertrade is

a. simple barter

b. clearing arrangements

c. switch trading

d. all of the above

5. EXIM

a. lends to foreign purchasers of U.S. goods

b. guarantees foreign loans for the purchase of U.S. goods

c. takes foreign deposits for Euro Dollar loans

d. none of the above

6. In the United States, export accounts receivable insurance is provided by the

a. commercial banks

b. EXIM

c. IMF

d. WTO

7. Tariff barriers are typically put into place

a. to protect local or "infant industries

b. as a profit making 'scheme"

c. to stop cross border traffic

d. none of the above

8. The accepting entity in a trade acceptance is a

a. bank

b. commercial company

c. A government entity

d. EXIM

9. What can multinational firms do to transfer funds out of countries having exchange or remittance restrictions commonly known as "Blocked Funds"

a. create a "Parallel Loan" wherein loans are funneled through a separate intermediary

b. increase sales taxes

c. use forward contracts

d. unilateral sanctions

10. Which of the following is a reason why Commercial Banks can facilitate International Trade

a. the exporter may not wish to accept credit risk of the importer

b. the government may impose exchange controls which prevent payment by the importer to the exporter

c. the exporter may need financing until payment for the goods is received

d. all the above