1

Regarding the foreign currency specified on a sales contract, which party has to bear more costs
in case currency appreciates?
a. Both parties
b. The buyer
c. The seller
d. Neither of the parties B
2
Concerns of the importer in transportation costs and risks:
a. The buyer needs funds for payment during the period before resale of goods and prefers that
the seller finances the transaction.
b. The seller wants the buyer to bear the transportation and insurance costs and to deliver the
goods and transfer ownership at his own warehouse or at a local port.
c. The buyer needs funds for production during the period before payment is received and
prefers that the seller finances the transaction.
d. The buyer wants the seller to bear the transportation and insurance costs and to have the
goods delivered to a local, home-country delivery point where ownership is assumed. D
3
New trading relationships in developing countries often starts with:
a. Liberal terms
b. Wire transfer
c. Conservative terms
d. Cash payment C
4
The arbitration that forces the parties to comply to arbitration award and can't appeal the final
solutions is:
a. Binding arbitration
b. Submission (supplementary) agreements
c. Mutual understanding of contract provisions
d. Nonbinding arbitration A
5
_____ is in the business of purchasing or the brokering of raw materials, component parts,
finished goods, or services for manufacturing, assembly, or resale to others.
a. The insurer
b. The carrier
c. The buyer
d. The seller C
6
Which problem(s) not anticipated in an international sales contract?
a. Market size, strategy, and vision of the business partner
b. Provisions for documentation, damages, specific performance, and arbitration
c. The credibility of the business partner
d. The fluctuations of the USD/EUR exchange rate A
7
The payment term is the most commonly used in international transactions:
a. Documentary collections
 b. Open account
c. Cash in advance
d. Documentary credits D
8
The payment term requires high trust or confidence in importer:
a. Documentary collections
b. Letter of credits
c. Open account
d. Cash in advance C
9
Concerns of the exporter in financing the transaction:
a. Seller prefers that the seller bears the credit risk and wants to make certain he receives
payment for goods shipped.
b. Seller needs funds for payment during the period before resale of goods and prefers that the
buyer finances the transaction.
c. Seller needs funds for production during the period before payment is received and prefers
that the buyer finances the transaction.
d. Seller prefers that the buyer bears the credit risk and wants to make certain that he receives
the goods once he has paid. C
10
Which is the concern(s) for the buyer if Christmas merchandise scheduled for arrival in October
is delayed and arrived at the port in mid-December that it was too late for the Christmas holiday
selling season?
a. Lag time
b. Condition of goods
c. Timeliness of receipt of goods
d. Distances C
11
Which of the following is not in concerns of importer?
a. Transportation costs and risks
b. Assurance of delivery and correct count
c. Timeliness of receipt of goods
d. Seller as a broker D
12
The payment term has the highest risk for exporter:
Select one:
a. Collection against documents
b. Open account
c. Cash in advance
d. Letter of credits B
13
One of the differences in concerns for the importer and exporter:
a. Political and legal risks
b. Transportation costs and risks
c. Finance the transaction
d. Currency risk A
14
Concerns of the importer in financing the transaction:
a. The seller prefers that the buyer bears the credit risk and wants to make certain he receives
payment for goods shipped.
b. The buyer prefers that the seller bears the credit risk and wants to make certain that he
receives the goods once he has paid.
c. The buyer needs funds for payment during the period before resale of goods and prefers that
the seller finances the transaction.
d. The buyer needs funds for production during the period before payment is received and
prefers that the seller finances the transaction. C
15
Which is the top priority factor considered before deciding on a method of international
payment?
a. The potential for currency fluctuations
b. Distance between the seller and the buyer
c. Relationship between the seller and the buyer
d. Political stability in either or both countries C
16
When will both parties need arbitration?
a. The third country's arbitrator requires arbitration.
b. Both parties agree to arbitration rather than legal action to resolve a dispute.
c. One party agrees to arbitration rather than legal action to resolve a dispute.
d. Both parties disagree with arbitration rather than legal action to resolve a dispute. C
17
It is _______ that disputes will arise in international transactions.
a. possible
b. avoidable
c. unlikely
d. inevitable D
18
The concern that the seller wants to make certain goods shipped is equal to goods received:
a. Timeliness of receipt of goods
b. Quality of goods
c. Assurance of delivery and correct count
d. Condition of goodsC
19
Which of these issues considered in international transactions?
a. Political risks
b. Credit risks
c. Currency fluctuation risks
d. All of the others D
20
Regarding the transportation costs specified on the sales contract, which party has to bear the
highest costs in DDP?
a. The seller
b. Both parties
 c. Neither of the parties
d. The buyer A
21
Concerns of the exporter in political and legal risks:
a. Seller prefers that the buyer bears the credit risk and wants to make certain he receives
payment for goods shipped.
b. Seller considers political risk to be minimal in part because he lives with it every day and
understands it.
c. Seller needs funds for production during the period before payment is received and prefers
that the buyer finances the transaction.
d. Seller may consider political and legal risks to be significant, especially if the country appears
to be unstable by his own standards. D
22
Most people enter into an agreement to purchase and sell expect ___________
a. One side of the trading relationship will gain more benefits than the other.
b. Costs will be reduced.
c. Prices will satisfy both parties.
d. Everything will go smoothly, and both parties will gain from the transaction. D
23
The chosen arbitrator should be:
a. An arbitrator chosen by either of the parties' arbitrator
b. The third "neutral" arbitrator
c. The arbitrator of the buyer's country
d. The arbitrator of the seller's country B
24
Concerns of the importer in political and legal risks:
a. The buyer may consider political and legal risks to be significant, especially if the country
appears to be unstable by his own standards.
b. The buyer needs funds for payment during the period before resale of goods and prefers that
the seller finances the transaction.
c. The buyer prefers that the seller bears the credit risk and wants to make certain that he
receives the goods once he has paid.
d. The buyer considers political risks to be minimal in part because he lives with it every day
and understands it. D
25
The currency used in sales contract could be:
a. third country's currency
b. both countries' currency based on the contract agreement
c. same as buyer's currency
d. same as seller's currency B
26
The payment term offers the highest security for exporter:
a. Documentary collections
b. Open account
c. Cash in advance
d. Documentary credits C
27
Which statement is incorrect?
a. Documentary collection is easier to use than letter of credits, and bank charges are usually
lower.
b. Documentary collection procedures entail some risks for both seller and buyer.
c. Documentary credit is easier to use than documentary collection, and bank charges are usually
lower.
d. Documentary credit provides a high degree of protection for both buyer and seller. C
28
The common payment method that has high flexibility, safety, simplicity, and benefits of cash
savings is:
Select one:
a. Promissory notes
b. Cards
c. Drafts
d. Check (cheque) B
29
In cash in advance, which of these questions is the prioritized concern for the seller?
a. Is the buyer willing to pay at least some proportion in advance?
b. Will the seller comply with the terms and ship goods as promised?
c. Is cash in advance term the only option available?
d. What recourse is available if goods are not shipped as ordered? A
30
Which of these issues is the concern only for the importer?
a. Lag time
b. Insurance
c. Currency risks
d. Transportation costs A
31
Which is not the common different terms of international payments?
a. Documentary letter of credits
b. Open account
c. Banknotes
d. Bank drafts C
32
The payment term requires the highest responsibilities of the banks in international transactions:
a. Consignment
b. Documentary collections
c. Letter of credits
d. Telegraphic transfer C
33
The contract provisions compels the breaching party to fulfill contract agreement in terms of
non-monetary compensation:
a. Applicable governing laws
b. Arbitration clauses
c. Specific performance clauses
 d. Damages clauses C
34
Which statement is true about open account?
a. Open account payment terms can be expected from sellers early in business relationships.
b. The buyer agrees to pay for goods ordered within a designated time after their shipment.
c. Open account provides the greatest security for seller and greatest risk for buyer.
d. The buyer pays the seller prior to the shipment of goods ordered. B
35
In which case below, buyer's claims against the seller happen?
a. Goods not be delivered
b. The right amount of goods be delivered
c. Goods be delivered
d. The right quality of goods be delivered A
36
Timeliness of the receipt of goods is the matter of:
a. Goods are delivered at the border on time.
b. Goods are delivered to the buyer on time.
c. Goods are shipped from the seller on time.
d. Goods are in transit on time according to the shipping plan. B
37
Regarding foreign exchange risks, which of the following is correct?
a. Importers and exporters use a third currency to guard against currency fluctuation risks.
b. Exporters use their own country's currency in sales contract.
c. Importers accept the exporters' currency, e.g. USD.
d. Importers use their own country's currency in sales contract. A
38
Concerns of the exporter in transportation costs and risks:
a. Buyer wants the seller to bear the transportation and insurance costs and to have the goods
delivered to a local, home-country delivery point where ownership is assumed.
b. Seller needs funds for production during the period before payment is received and prefers
that the seller finances the transaction.
c. Seller needs funds for payment during the period before resale of goods and prefers that the
seller finances the transaction.
d. Seller wants the buyer to bear the transportation and insurance costs and to deliver the goods
and transfer ownership at his own warehouse or at a local port. D
39
The currency not widely used in international payment:
a. The US Dollar ($)
b. The Euro (€)
c. The Japanese Yen (¥)
d. The German Deutsche Mark (DM) D
40
The best way to control the results of your contract is:
a. using boilerplate in the contract.
b. to clarify each party's responsibility in the agreement.
c. giving full control to the counterparty.
 d. writing the contract in the other party's language. B
A 1. A hedge is a contract that provides protection against the risk of loss from a change in
_________
A. Foreign exchange rates
B. Inflation
C. Interest rate
D. None of the above
A 2. There are 03 common methods of hedging: forward market hedge, money market
hedge and option market
A. True
B. False
A 3. A "put" option gives the buyer the _________, but not the _______________ to sell a
specified number of foreign currency units to the option seller at a fixed dollar price, up to the
option's expiration date
A. Right, obligation
B. Obligation, right
C. None of the above
B 4. Which of following payment method provides greatest security for seller and greatest
risk for buyer?
A. Open account
B. Cash in advance
C. Documentary credit
D. Letter of credit
B 5. ____________________ is a bank's commitment to pay the seller a specified sum on
behalf of the buyer under precisely defined conditions. The seller is assured that payment will be
received after the goods are shipped so long as they have presented the complying documents
A. Collection order
B. Letter of credit
C. Letter of commission
D. Agreement of credit
A 6. In letter of credit transaction, the bank deals only with the documents regarding the
goods rather than the goods themselves
A. True
B. False
B 7. Similar to letter of credit, banks in documentary collection involved will always
guarantee payment for the seller
A. True
B. False
C 8. D/P stands for:
A. Delivery against payment
B. Delivery against promise
C. Documents against payment
D. Documents against promise
D 9. You work for a small United States importer of textiles. You are negotiating a supply
contract with a very large Italian exporter. Which of the following devices could help protect
your company from currency risk?
A. Put in a contract clause under which you share the currency fluctuation risk with the seller
B. Specify that payment will be made in US dollars
C. Accept that payment will be in Euro, but then use currency hedging via a forward exchange
contract to look in the exchange rate in force when the contract is signed
D. All of the above are devices that would help protect your company from currency risk
B 10. An exporter agrees to sell a container of a certain type of merchandise for 10,000 (ten
thousand) euro CIP Incoterm 2010. The exporter is aware that under CIP terms he must insure
the goods properly. For how much value should he obtain insurance coverage?
A. 10,000 EUR
B. 11,000 EUR
C. 1,000 EUR
D. NOne of the above
A 11. The description of the goods in an export contract is: "titanium alloy widgets" (a
made-up term for a technical item). When the goods arrive, however, the importer discovers that
the widgets delivered are 60% titanium widgets, while he was expecting the higher-quality 90%
titanium widgets. If the importer sues for breach of contract, who will win?
A. Exporter will win, because the goods fit the contract description
B. Importer will win, because the courts will apply custom of trade
C. Importer will win, because the courts will look to the buyer's expectation
A 12. An Australia exporter and a Chinese iraporter negotiate a contract specifying "CIP
Incoterm" (but without any further detail on which version of Incoterm to apply) signed in 2010,
for goods to be delivered in monthly installments over an 18-month period in 2011 and 2012.
Which version of Incoterms should apply to this transaction?
A. Incoterm 2010
B. Incoterm 2011
C. Australian Incoterms
D. Chinese Incoterms
D 13. Incoterms specify the rights and responsibilities of the parties principally in what type
of international contract?
A. Purchase Order
B. Contract of carriage
C. Shipping contract
D. Sale contract
C 14. Which contract clause protects both sides in the event that there is an unforesecable
event (sometimes called an "act of God") that prevents one of them from fulfilling the
contracting
A. "Choice of law" clause
B. "Liquidated damages" clause
C. "Force majeure" clause
D. Insurance
C 15. Which of the following statements best describes INcoterm 2010?
A. Incoterms 2010 are a set of binding international laws that have global application in contracts
of sale between exporters and importers
B. Incoterms 2010 are international commercial regulations that become effective with
enforcement by individual governments around the world
C. Incoterms 2010 are a set of rules applying to the contract of sale which become effective by
voluntary incorporation into the contract of sale
B 16. In Incoterms 2010, the place of delivery is always the place of destination of the
goods.
A. True
B. False
D 17. Which of these Incoterms represents the LEAST responsiblity for the exporter?
A. CIF
B. DAT
C. DDP
D. EXW
A 18. Is a Documentary credit also known as a "letter of credit", "commercial credit" or
"L/C"?
A. True
B. False
B 19. An Amercian exporter is delivering goods to Laguardia Airport in New York for air
shipment to Berlin, and the air freight and insurance coverage is to be arranged for and paid by
the importer. The correct Incoterm in such circumstances would be:
A. DDP Berlin Incoterms 2010
B. FCA Laguardia Airport Incoterms 2010
C. FOB Airport Laguardia Incoterms 2010
D. CPT Berlin Incoterms 2010
D 20. Which of the following Incoterms does the buyer pay for main carriage?
A. DDP
B. DAP
C. CIP
D. FCA
B 21. Purchase on open account means that the buyer agrees to pay for goods ordered
immediately, i.e on the same day with shipment date
A. True
B. False
A 22. An import buyer in Mexico is seeking to arrange the cheapest final cost to its
company of purchasing merchandise from Bordeaux sea port, France. The French exporter has
offered two price quotes:
1. 2500 Euro per container FOB Bordeaux port, France, Incoterms 2010, or
2. 3100 per container CIF Veracruz sea port, Mexico, Incoterms 2010.

The importer calls its own freight forwarder and asks for a frieght + insurance quote from
Bordeaux to Veracruz for this merchandise. The forwarder says that freight and insurance will
cost the equivalent of 525 Euro per container from Bordeaux to Veracruz. On which Incoterm
should the importer base its Purchase Order? (Assume that the importer is more concerned about
total cost than about risk)

A. FOB Bordeaux
B. CIF Veracruz
C. FAS Bordeaux
D. EXW
A 23. Under a documentary collection, the buyer's bank is instructed not to transfer the
documents to the buyer until payment is made (i.e__________), or upon guarantee that payment
will be made within a specified period of time (i.e______________)
A. D/P, D/A
B. D/A, D/P
C. Cash in advance, open account
D. Open account, cash in advance
C 24. Under this group of Incoterms 2010, the point of delivery (transfer of risk) from the
seller to the buyer is at the point of shipment. However, this group extend the seller's obligation
with regard to the cost of carriage and insurance (if any) up to the point of destination. Which
group is mentioned here?
A. Group E term (EXW)
B. Group F terms (FCA, FAS, FOB)
C. Group C terms (CFR, CIF, CPT, CIP)
D. Group D terms (DAT, DAP, DDP)
D 25. Which of the follwing is NOT covered under Incoterms?
A. Transfer of title
B. Payment terms or methods
C. Task, cost and risk of buyer and seller associated with the transportation and delivery of goods
D. Both A and B
E. Both B and C
B 26. As defined in Uniform Rules for Collection - URC 522, the bank that is responsible
for making the documents available to the drawee is known as
A. the remitting bank
B. the presenting bank
C. the reimbursing bank
A 27. Which of the following is not a commercial documents?
A. Bill of exchange
B. Bill of lading
C. Commercial invoice
D. Packing list
B 28. In documentary collection, the party who initiates the collection is called:
A. drawee
B. principal
C. remitting bank
D. presenting bank
B 29. In __________ , when an issuing bank determines that a presentation is complying, it
must honour its undertaking to make settlement to the beneficiary even if the importer has not
yet received the goods.
A. Documentary collection
B. Documentary credit
C. Cash in advance
D. Open account
C 30. What is the international treaty that aids parties in giving the Award coercive power,
allowing cross- border implementation of awards made in other countries?
A. The 1961 Vienna Convention on Diplomatic Relations
B. The 1980 United Nations Convention on Contracts for the International Sale of Goods
C. The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards
A 1. Which of the following is not a commercial document?
A. Bill of exchange
B. Bill of lading
C. Commercial invoice
D. Packing list
C 5. Which of the following parties receive documents for collection from the exporter?
A. Drawee
B. Principal
C. Remitting bank
D. Presenting bank
B 8. Which brings the most risk for exporter?
A. Cash in advance
B. D/A
C. D/P
F Remitting bank, collecting bank under Documentary Collection have an
undertaking/commitment to pay to the exporter.
A An issuing bank is irrevocably bound by the terms of the amendment as of the time:

A. the issuing bank issues the amendment

B. the advising bank receives the amendment
C. the confirming bank agrees to confirm the amendment
D. the beneficiary receives the amendment
B If a beneficiary is not satisfied that he can comply with the terms and conditions of a
documentary credit, he should contact the applicant so that the applicant can request that the
issuing bank issue:
A. A confirmation
B. An amendment
C. A replacement credit
C From the importer's viewpoint, which one of the following methods of settlement
involves the least risk?
A. Documentary credit L/C
B. Documentary collection
C. Open account
D. Advance payment
F An issuing bank must honour a presentation of documents that complies with the terms
and conditions of the credit and the details of the sales agreement or contract between the seller
and buyer.
B A documentary credit is issued stating "This credit is issued subject to UCP600.". In this
case, the rules are:

A. Binding on the issuing bank only

B. Binding on all parties to the credit
D As defined in URC 522, "financial documents" means:
A. Invoice and certificate of origin
B. Invoice, transport documents and documents of title.
C. Bill of exchange and invoice
D. Bill of exchange
F The Uniform Rules for Collections govern all collections.
B An exporter:
- sends the commercial invoice and transport documents directly to an importer
- sends the Bill of Exchange through the banking system for presentation to the importer

What is being described here?

A.Documentary collection
B. Clean collection
C. Neither A nor B.
F URC 522 takes precedence over local laws and regulations in relation to the operation of
documentary collections.
B Which of the following best defines the role of the remitting bank?

A. The remitting bank must examine the documents in detail and undertakes to make settlement
with documents that comply with URC 522.
B. The remitting bank should follow the instructions of the principal as outlined in the collection
instructions but makes no undertaking to make settlement to the principal.
D As defined in URC 522, banks assume responsibility for:

A. Error(s) in translation
B. Error(s) in interpretation of technical terms
C. Error(s) arising in transmission of telecommunications
D. None of the above
F Documentary collection" means the collection of financial documents.
B What does the term D/P means in a documentary collection?

A. Days paid
B. Documents against payment
C. Deferred payment
D Documents presented
C An irrevocable Credit can neither be amended nor cancelled without the agreement of:
A. The issuing bank, the confirming bank, (if any), and the applicant.
B. The applicant, the issuing bank and the beneficiary.
C. The issuing bank, the confirming bank, (if any), and the beneficiary
T Clean collection" means collection of financial documents not accompanied by
commercial documents.
A Which of the following statement is correct?

A. In letter of credit operation all parties concerned deal with documents.

B. In letter of credit operation all parties concerned deal with performance and services.
C. In letter of credit operation all parties concerned deal with goods and payment
A Typically, a Letter of Credit is issued:

A. Before the beneficiary ships the goods

B. After the beneficiary ships the goods
C. When the applicant receives the goods
T When an issuing bank determines that a presentation is complying, it must honour its
undertaking to make settlement to the beneficiary even if the importer has not yet received the
goods.
F Under EXW Warehouse 12, Hanoi (Incoterms 2010), the seller must make the goods
available to the buyer loaded on the agreed means of conveyance at "Warehouse 12"?
C Select the correct statement:

A. Under EXW Incoterms® 2010, title or ownership of the goods transfers from the seller to
buyer when the goods are placed at the disposal of the buyer at the named place of delivery
B.. Under EXW Incoterms®2010, title or ownership of the goods transfers from seller to buyer
when the goods reach the country of import.
C. Incoterms® rules do not deal with the transfer of property rights or ownership of the goods.
A Under EXW Incoterms®2010 the seller must:
A. Make the goods available for transport at the seller's premises or other named place of
delivery
B. Clear the goods for export
C. Organize and pay for carriage of the goods to the country of import
D. Arrange for insurance of the goods in transit
T Under FCA No.1 Tran Duy Hung street (seller's premises), Hanoi, Vietnam,
Incoterms®2010, the seller must make the goods available to the buyer load on a means of
conveyance provided by the buyer at No.1 Tran Duy Hung street.
D Which of the following delivery documents may the seller need to provide to the buyer
under FCA (named place of delivery) Incoterms®2010?

A. Road consignment note

B. Rail consignment note
C. Air waybill
D. Any of the above
F Under FCA (named place of delivery) Incoterms®2010, the buyer must pay a cost from
the point of delivery including the cost of customs formalities and export duties.
B Under FAS, the buyer is responsible for:

A. Export clearance
B. Import clearance
C. Both import and export clearance
F "Free Alongside Ship" means that the seller delivers the goods are placed alongside the
vessel nominated by the buyer at the named port of destination.
F Under FOB, the seller is required to make a contract of carriage for the goods?
F Under FOB, the buyer has a responsibility to the seller to arrange for the contract of
insurance?
T Under FOB, the seller bears the risks of loss or damage to the goods until they have been
delivered on board the named vessel at the named port of shipment.
B Under CPT, the sellers delivers when the goods:

A. Are handed over to the carrier or another person nominated by the seller at the seller's
premises
B. Are handed over to the carrier or another person nominated by the seller at the agreed place of
delivery
C. Are handed over to the carrier or another person nominated by the seller at the port of loading
D. Are handed over to the carrier or another person nominated by the seller at the carrier's
appointed location
F Under CPT, the seller is under no obligation to provide the buyer with a transport
document.
A Under CPT, the buyer takes care of:

A. Local transport, if any, in country of import, import clearance and unloading

B. Local transport, if any, in country of import, import clearance, unloading, export clearance
and insurance
C. Main transport, import clearance, loading and unloading
C Under CIP, the seller bears the risks until the goods:

A. Are delivered to the carrier at the port of loading

B. Are delivered to the carrier at the premises of the seller
C. Are delivered to the carrier at an agreed place
C Under CIP, the seller takes care of:

A. Local transport in country of export, export clearance, loading, unloading at destination and
insurance
B. Local transport in country of export, export clearance, loading, import clearance and
insurance
C. Local transport in country of export, export clearance, loading and insurance
F Under CFR, the buyer is responsible for arranging the contract of carriage to the named
port of destination.
B Under FOB, The seller bears all risks of loss or damage to the goods until they have been
delivered:
A. Alongside the named ship at the port of shipment
B. On board the named ship at the port of shipment
C. On board the named ship at the port of destination
F The seller is responsible for both export and import clearance under CIF Incoterms®
rules 2010.
F Under CIF Incoterms® rules 2010, the maximum insurance cover shall be the price
provided in the contract plus 10%, i.e 100%.
A Under DAP, delivery occurs when the seller places the goods at the disposal of the buyer:

A. On the arriving means of transport ready for unloading at a named place of destination
B. Unloaded from the arriving means of transport at a named place of destination
F Under DAP, the named place of destination must be an inland place.
C Under DAT, the terminal:
A. Must be a road, rail or air terminal or container yard
B. Must be a road, rail or air terminal, warehouse, container yard or quay
C. May be a road, rail or air terminal, warehouse, container yard or quay
D. May only be a road, rail or air terminal or container yard
B Under DAT, the seller bears the risk until it places the goods at the disposal of the buyer:

A. On the arriving means of transport ready for unloading at the named terminal
B. Unloaded from the arriving means of transport at the named terminal
B Under DAT, the buyer is responsible for:

A. Main transport, import clearance, unloading and local transportation in country of import
B. Import clearance and local transportation in the country of import
C. Export clearance, import clearance and local transportation in the country of import
F Under DDP, the seller is responsible for unloading from the arriving means of transport
at the named place of destination?
T DDP is the only Incoterms® rule whereby the seller is responsible for both import and
export clearance
T In terms of Incoterms® rules, DDP represents the maximum responsibility for the seller