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International Finance Practice Questions with answers and explanations
Typology: Exercises
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Q1. The risks of a bank serving an importer in collection and a documentary credit are: a. True b. False Q2. Amendments to a Letter of Credit (L/C) can only be made by the L/C issuing bank. a. True b. False Q3. The notification of amendments to the beneficiary in a letter of credit can only be carried out by the issuing bank if the L/C stipulates: a. True b. False Q4. On October 10, 2005, Bank A received a Bill of Exchange demanding payment dated October 1, 2005, with a stipulated payment term of 30 days after sight. As the issuing bank, Bank A must make the payment: a. 30 days from October 1, 2005 b. 30 days from October 11, 2005 Q5. If an L/C allows document presentation at VCB (Vietcombank), and the documents are presented at ICB (another bank), and ICB transfers the documents to the L/C issuing bank to claim payment, and the issuing bank refuses to make the payment: a. True b. False Q6. In the collection method, the person signing the promissory note is: a. Exporter b. Importer c. Bank Q7. In a documentary credit, the party responsible for paying the promissory note is: a. Exporter b. Importer c. Issuing bank d. Confirming bank
Q8. When receiving incomplete or unclear instructions for a letter of credit notification, who is responsible for providing the necessary information promptly to assist the advising bank in verifying the outward appearance of the letter of credit? a. Exporter b. Importer c. Issuing bank d. Confirming bank e. Negotiating bank f. Reimbursing bank Q9. When receiving incomplete or unclear instructions for a letter of credit notification, can the advising bank provide preliminary information to the beneficiary without assuming any responsibility? a. True b. False Q10. In the collection method, the party accepting the promissory note is: a. Exporter b. Importer c. Bank Q11. Using a confirmed Letter of Credit in a situation where the exporter does not trust the payment capability of the issuing bank: a. True b. False Q12. Using Deferred Payment (D/P) in collection is safer for the exporter than using Documents against Acceptance (D/A). a. True b. False Answers: