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International Finance Practice Test with Answers, Exercises of International Finance and Trade

Foreign Trade UniversityInternational Finance and Trade

International Finance Practice Questions with answers and explanations

Typology: Exercises

2021/2022

Available from 01/24/2024

student-H205002
student-H205002 🇻🇳

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International Finance | S02.PQ2 | FTU
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
pf3

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International Finance | S02.PQ2 | FTU

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:

  1. Answer: B - Explanation: In the collection method, the bank serving the importer acts as an intermediary in payment and does not face significant risks. In contrast, in the letter of credit payment, the issuing bank may face risks if the importer defaults. Q2. Answer: A - Explanation: In a documentary credit, the issuing bank is responsible for making amendments to the L/C, and only they have the authority to do so. Q3. Answer: A - Explanation: The issuing bank, which issues the letter of credit, has the responsibility to notify the beneficiary of any amendments made to the L/C.