Free Online Course in International Business

Assessment

1.                     Which of the following best explains what happens when medium- and long-term financing is provided through an Ex-Im Bank guarantee to a US exporter?

a.      Unable to get attractive financing terms in his country that would allow the purchase of the US exporter’s product, the foreign buyer seeks financing assistance from the US exporter.  The US exporter provides this financing through his bank with an Ex-Im Bank guarantee.  The importer gets term financing, and the exporter is paid in installments over the term of the financing.

b.      Unable to get attractive financing terms in his country that would allow the purchase of the US exporter’s product, the foreign buyer seeks financing assistance from the US exporter.  The US exporter provides this financing directly with an Ex-Im Bank guarantee.  The importer gets term financing, and the exporter is paid in installments over the term of the financing.

c.       Unable to get attractive financing terms in his country that would allow the purchase of the US exporter’s product, the foreign buyer seeks financing assistance from the US exporter.  The US exporter provides this financing through his bank with an Ex-Im Bank guarantee.  The importer gets term financing, and the exporter is paid in full at the time of the sale.

d.      Unable to get attractive financing terms in his country that would allow the purchase of the US exporter’s product, the foreign buyer seeks financing assistance from the US exporter.  The US exporter provides this financing through a foreign bank in the country of the buyer with an Ex-Im Bank guarantee.  The importer gets term financing, and the exporter is paid in full at the time of the sale.

2.                     Which of the following product groups would be considered for medium- and long-term financing through an Ex-Im Bank guarantee to a US exporter?

a.      small manufactured goods, 3 to 6 months inventory supply and accounts receivable

b.      large industrial equipment, the construction of a dam, a jet plane and long-term service contracts

c.       toys, clothing, household consumer goods and vegetables

d.      pre-shipment inventory and post-shipment accounts receivable.

3.                     Which of the following best describes how to qualify for Ex-Im Bank medium- and long-term financing?

a.      revenue life of the product, dollar value of the items being imported, credit-worthiness of the buyer and country credit risk

b.      the short-term life and dollar value of the items being imported without consideration of the buyer’s credit because it is supported by a blanket insurance policy

c.       the buyer through local banks’ guarantee of credit-worthiness is financed through the Ex-Im bank directly

d.      the credit-worthiness of the buyer and the country risk is automatically assumed by the coverage in Ex-Im Bank’s country limitation schedule..

4.                     Ex-Im Bank provides medium- and long-term financing

a.      to the buyer under more favorable terms than would be available in the home country.

b.      that would support and increase imports into the US that would not normally be possible.

c.       Alternative financing options that provide a guarantee of payment in case the buyer defaults on installment payments.

d.      that would support and increase export sales that would not normally be possible

(Correct answers: 1=c, 2=b, 3=a, 4=d)