problem 1:

(a) Provide clear definitions to the following terms used in relation to international trade finance:

(i) Sea waybills;

(ii) Certificate of origin;

(iii) Free Carrier (FCA);

(iv) Ex Works (EXW)

(v) Open account

(b) Assess how ‘incoterms’ affect the documents that exporters must produce.

(c) Critically assess the risks covered by Gerling NCM International Policy and describe how an exporter can make use of this policy in his cash flow management.

(d) Consider the importance of Article 23 (Marine/ Ocean Bill of Lading) under the Uniform Customs and Practice for Documentary Credits (UCP 500) (1993 revision).

problem 2:

(i) What do you understand by the following terms in relation to banking?

(a) Expected Loss

(b) Unexpected Loss

(c) Credit risk drivers;

(d) Probability of Default

(ii) Analyze the different ways in which banks can hedge credit risks.