INTERNATIONAL PAYMENT- PT3 QUESTIONS AND ANSWERS

B 1. According to UCP600, the issuing bank has 07 banking days following day of presentation in which to determine if the documents comply A. True B. False A 2. An exporter is willing to release the shipping documents directly to the buyer, but wishes to retain some guarantee of payment if the buyer fails to pay on the due date. Which type of documentary credit best suits the exporters needs? A. Standby B. Transferable C. Revolving D. Evergreen B 3. Which form of credit might enable a beneficiary to obtain pre-shipment financing without impacting on their credit facility? A. Transferable LC B. Red Clause LC C. Confirmed LC D. Standby LC A 4. The buyer and seller agree that goods will be shipped on a continuing basis (i.e USD 10,000.00 per month rom January to June 2019). They also want to establish one L/C to handle all the shipments rather than to establish individual L/C for each shipment. Which type of L/C should they use in this case? A. Revolving L/C B. Transferable L/C C. Back to back L/C D. Standby L/C A 5. One of the disadvantages of the buyer in red clause L/C is that the seller may not excute the contract and the buyer may totally lose the paid advances A. True B. False D 6. Which type of L/C is often called "non-performing L/C" because they are only used as a backup payment method if the collection in a primary payment method is past due? A. Transferable LC B. Back to back L/C C. Red Clause L/C D. Standby L/C C 7. Transferable L/C can be transferred in ______________ A. in whole only B. in part only C. in whole or in part D. None of the above B 8. Transferable L/C can be transferred more than once time. It means that a second beneficiary can transfer to a third beneficiary A. True B. False D 9. Which term can the intermediary change from the original L/C when transferring L/C? A. Unit price B. Amout of the L/C C. Period of presentation D. All of the above B 10. Banks are required to do their reasonable care to verify that the documents submitted appear to be as listed in the L/C. They are, however, under no obligation to confirm the ___________ of the documents submitted A. Quantity B. Authenticity C. None of the above B 11. The L/C states the value is USD 20.000 per month for 8 months from May to December. Each month the seller may draw up to USD20.000 and the issuing bank will automatically reinstate it for another USD20.000 for such 8 months. In May, the seller only utilizes USD15.000, and then the value of L/C in June increases to USD25.000. What type of L/C is mentioned here? A. Non-cumulative revolving L/C B. Cumulative revolving L/C C. Time revolving L/C D. None of the above B 12. Documents presented under L/C issued by Bank Global are fully complied. The issuing bank pays the beneficiary, and the applicant has already made payment to his bank. However, some days after, the applicant finds that the goods are not in good quality. He goes to the issuing bank and request the bank to refund such payment for him. In this case: A. The bank has to refund payment to the applicant B. The bank has no obligation to refund payment C. The bank has to ask for the opinion of the beneficiary A 13. Because there are additional commitment of payment from another bank, _______________ are more expensive than ______________________ A. Confirmed L/C, unconfirmed L/C B. Unconfirmed L/C, confirmed L/C C. Revocable L/C, irrevocable L/C D. Irrevocable L/C, revocable L/C B 14. Which type of L/C gives the seller greatest protection? A. Transferable L/C B. Confirmed L/C C. Standby L/C D. Revocable L/C A 15. The L/C state: "Credit available with any bank, by negotiation for payment of beneficiary's draft at sight. The L/C is subject to UCP600" This is: A. Irrevocable Negotiation L/C B. Revocable Negotiation L/C C. Irrevocable Straight L/C D. Revocable Straight L/C B 16. L/C does not contain a confirmation request by the issuing bank. However, the beneficiary and the advising bank make an independent agreement that adds the advising bank's confirmation to a credit for a fee. This is called: A. Open confirmation B. Silent confirmation C. Straight confirmation D. None of the above B 17. Air waybill is a negotiable document A. True B. False B 18. In documentary credit transactions, insurance document must be effective after date of loading of the goods on board a transport vessel A. True B. False B 19. Which document indicate that goods have been checked/tested (typically according to a set of industry, customer, government's specifications) prior to the shipment and the results of such checking/ testing? A. Insurance certificate B. Inspection certificate C. Bill of exchange D. Bill of lading A 20. If the goods are received in good condition, the carrier will issue ____________ to the shipper A. Clean bill of lading B. Claused bill of lading C. Straight bill of lading D. None of the others