Essentials of International Trade Post Course Quiz Welcome to the Essentials of International Trade Post Course Kindly fill in your details before attending to the questions. Thank you Full Name Phone Organization 1. Which of the following statements best describes International tradeTransaction between a buyer and a sellerExchange of goods and services by two traders both resident in the same countryExchange of goods across national boundries by a buyer and a sellerExchange of goods and services by buyers and sellers located in two different geographical locations.All of the above 2. Which of the following is not a feature of International TradeForeign Exchange and currency regulations.Diversity of language, culture and customsDifferent monetary units (Currencies)Disparity of geographical locations by trading partnersNone of the above 3. Which of the statements below is not a true reason for engaging in International Trade?To earn foreign exchange.To gain political advantage by the government in power over the oppositionComparative advantage of one country over the other in production of goods and services.To leverage investment opportunities in another countryAll of the above 4. The Uniform Rule for collections URC522 is the key guiding rule for Documentary Credit transaction.TrueFalse 5. Which of the following statement(s) is/are true of UCP600All imports into Nigeria, whether valid or not valid for FX, must be supported by a Form A.Imports into Nigeria must be on the basis of CIF.Letters of credit should be issued only after the registration and approval of the Form M by the Nigerian Customs Service(a) only(a) and (b) only. 6. Which of the following document is used to process commercial export transactionsNCX FormNXP FormForm MForm AAny of the above 7. All export proceeds for oil and non-oil export must be repatriated into theEscrow AccountCurrent accountExport proceed domiciliary accountSavings accountAny of the above 8. Which of the following statement(s) is/are not true of the Nigerian Import regulations:All imports into Nigeria, whether valid or not valid for FX, must be supported by a Form A.Imports into Nigeria must be on the basis of CIF.Letters of credit should be issued only after the registration and approval of the Form M by the Nigerian Customs Service(a) only(a) and (b) only. 9. All export proceeds for oil and non-oil exports must be expatriatedWithin 90 and 180 days respectivelyWithin 180 and 90 days respectivelyWithin 90 days in both casesWithin a maximum period of 270 daysWith a period not exceeding 360 days 10. Which of the following statement is true of Invisible trade?Trade transaction involving the exchange of goods and services.Trade transaction involving the exchange of currencies for payment of eligible service transactions.Transaction without the requirement for documentation.All transactions described as eligible by the Nigerian foreign exchange manual.All of the above. 11. Which of the following statement is NOT true of the validity period of a Form MForm M for general merchandise has a cumulative tenor of 540 Days. Extension beyond 540 days requires CBN approval.Form M for Plant & Machinery has a cumulative tenor of 1,080 days. Extension beyond 1,080 days year requires CBN approval.Form M for Plant and Machinery has an initial validity of 720 days.Form M for general merchandise has an initial validity of 360 daysNone of the above. 12. Which of the following is not a valid incoterm?CPTDAPFOCCFRCIF 13. Which of the following statements is true of Incoterms?Incoterms define where title of goods transfer.Incoterm addresses the price payable and the currency of transactionIncoterm constitutes a contractIncoterms define the point at which delivery of goods occurs, and who bears responsibility for risk and cost.None of the above 14. Which of the following is not a valid mode of payment in International trade?Telegraphic TransferLetters of CreditDocumentary CollectionOpen AccountAdvance Payment 15. Which of the statements below best describes a Letter of credit?An unconditional guarantee to effect payment to a beneficiary when goods have been delivered.A promise that goods described in a document presentation have been delivered to the importer.An undertaking to make payment to a beneficiary provided conforming documents are presented to an issuing bank.An undertaken to make payment to the beneficiary in the event that the goods are not delivered to the importer.All of the above. 16. When an Irrevocable unconfirmed Letter of credit is issued to a foreign beneficiary, the obligation to pay lies with the confirming bank.TrueFalse 17. A confirmed irrevocable letter of credit payable at Sight must be paid:Within 30 daysImmediately not exceeding 6 working daysImmediately within 2 working daysAs soon as possibleNone of the above 18. Under a Documentary Collection transaction, who has the obligation for payment?The Collecting bankThe remitting bankThe importerThe exporterThe Issuing bank 19. Which of the following is not a financial document in international Trade?Bill of ExchangeFinal InvoicePromissory noteLetter of creditNone of the above 20. Which of the following is not a special type of Letter of Credit (LC)?Red Clause LCUnconfirmed LCTransferable LCRevolving LCBack-to-back LC 21. A transferable Letter of credit involves two letters of credit and two different beneficiaries.TrueFalse 22. Which of the following document is an exchange control document?Form MCCVOerminal delivery order.Packing ListManufacturer’s certificate 23. Which of the following is not a party to a Letter of credit transaction?Issuing bankNegotiating bankRemitting bankConfirming bankAdvising Bank 24. Payment under a Standby Letter of Credit (or bank guarantee) is made when the opposing party has not fulfilled his obligation under a contract.TrueFalse 25. The Bill of Exchange is a promise to make payment of a certain sum of money to a stated party at a specified future date. It is signed in accordance to the mandate of the issuing party. This is a correct description of a Bill of exchange.Truefalse 26. Which of the following is not a trade financing method.Bill AvalizationPre-negotiationForfaitingBanker’s AcceptanceTrust Receipt 27. A cross boarder credit line enables banks to offer US$ financing without cash collateral.TrueFalse 28. Which of the following is the major risks applicable to a foreign currency financing transaction?Interest rate riskDocumentation riskLoss or damage riskExchange rate riskPerformance risk 29. Which of the following is NOT a feature of Pre-shipment export financing?Procurement financingWarehouse financingReceivable financingTransportation financingProcessing Financing 30. Which of the following statement is NOT true of Bill Avalization?Bill avalization is a guarantee issues by a bank to make a payment in the event of the payer’s default on its obligations.Bill avalization absorbs the Payer from the obligation of payment.A guarantee issued in addition to a Bill of Exchange is called an “Aval”.Bill avalization transfers payment risk form that of the payer to that of the Bank.Commodity bills avalization enables the company that issues the bill to get payment earlier either by discounting the Avalized bill or raising financing using the avalized bill as security. Time is Up!