Chapter 5
I. Select the best answer.
1. In L/C business , the exporter can receive the payment only when ( )
A. he has shipped the goods B.he has presented the documents
C.the documents presented constitute a complying presentation D.the importer has taken delivery of the goods.
2. In L/C business, the issuing bank can refuse to pay the credit amount when ()
A.the applicant prevents him from making payment
B.the goods are not the same as those stipulated in the sales contract C.one kind of document required by L/C isn‘t presented.
D.balance of the applicant‘s account is not enough for payment .
3. Of the following kinds of L/C, ( )is the L/C which requires no drafts at all.
A.sight payment credit B.deferred payment credit C.acceptance credit D.negotiation credit
4. Of the following kinds of L/C, ( ) is the L/C in which drafts are always required.
A.sight payment credit B.deferred payment credit C.acceptance credit D.negotiation credit
5. Of the following kinds of L/C, ( ) is the L/C which is especially suitable for
use to settle the payment of trade conducted through a middleman. A.non-transferable credit B.reciprocal credit C.revolving credit D.back to back credit
6. Of the following kinds of L/C, ( )is the L/C which is especially suitable for use to settle the payment of trade conducted through a middleman.
A. transferable credit B. reciprocal credit C. revolving credit D.confirmed credit
7. Of the following kinds of L/C, ( ) is the L/C which is especially suitable for use to settle the payment under a long term contract covering goods to be transported by regular partial shipments.
A.non-transferable credit B.reciprocal credit C.revolving credit D.back to back credit
8.Of the following kinds of L/C, () is the L/C which is especially suitable for use to settle the payment under counter trade.
A.non-transferable credit B.reciprocal credit C.revolving credit D.back to back credit
9. Confirmation of a credit may be given by ( )
A. the beneficiary at the request of the importer B. the advising bank at the request of the issuing bank C. the advising bank after the receipt of correct documentation D. the issuing bank after the receipt of correct documentation
10. The credit may only be confirmed if it is so authorized or allowed by ( )
A. the issuing bank B. the supplier C. the advising bank D. the beneficiary
11. The second beneficiary of a transferable letter of credit is the ( )
A. middleman
B. transferring bank
C. the applicant of the transferred credit D. real supplier of the goods
12. The first beneficiary of a transferable letter of credit is the ( )
A. middleman
B. transferring bank
C. the applicant of the transferred credit D. real supplier of the goods
13. The red clause credit is often used as a method of ( )
A. providing the buyer with funds prior to shipment B. providing the seller with funds prior to shipment
C. providing the buyer with funds after shipment D. providing the seller with funds after shipment
14. An applicant must reimburse an issuing bank unless he finds that ( )
A. goods are defective
B. goods are not as ordered in the sales contract
C. documents received do not allow him to clear the goods through customs
D. documents do not conform on the face to the terms and conditions of the credit
15. Application for any amendment to a letter of credit should be given to the issuing bank by ( )
A. the applicant B. the beneficiary C. the advising bank D. the nominated bank
16. The message type which is used to send a amendment notice of a documentary credit through SWIFT is numbered ( )
A. 700 B. 705 C. 707 D. 710
17.Among all the financial methods mentioned bellow , which method provides funds without recourse ？ ( )
A. packing loans B. bill discounting C. forfaiting
D. borrowing docs against T/R
18.Under letter of credit, the primary debtor is the( )
A. applicant B. importer C. issuing bank D. nominated bank
19. The applicant of letter of credit is ( )
A. the exporter B. the importer C. the exporter?s bank D. the importer‘s bank
20. The beneficiary of letter of credit is ( )
A. the exporter B. the importer C. the exporter?s bank D. the importer?s bank
21.A letter of credit which is expired on Oct. 1, 2008 specifies that “documents must be presented within 15days after the on board date of bill of lading”. If the on board date of bill of lading is Sep. 10,2008, the latest date of presentation must be ( )
A. Sep. 24 ,2008 B. Sep. 25 ,2008 C. Sep. 26 ,2008 D. Oct. 1, 2008
22. If there is no indication in the credit of the insurance coverage required, the amount of insurance coverage must be at least ( ) of the CIF or CIP value of the goods.
A. 100% B.105% C. 110% D.120%
23. Which of the following actions performed by the nominated bank is not regard as the action of honor( )
A. to pay at sight under sight payment credit
B. to incur a deferred payment undertaking and pay at maturity under deferred payment credit
C. to accept the draft and pay at maturity under acceptance credit D. to negotiate under negotiation credit