CBP International Banking Practices 3

Question 1

Which incoterm places maximum responsibility on the seller for delivery costs and risks all the way to the buyer's named destination?

Accepted Answer

DDP (Delivered Duty Paid)

Answer

Under DDP, the seller bears all costs and risks including import duties and taxes until the goods are delivered at the buyer's named place.

Question 2

A syndicated loan facility in which one bank originates the loan and then sells participations to other banks is known as:

Accepted Answer

A lead-managed syndication

Answer

In a lead-managed syndication, the arranging bank underwrites and then distributes portions of the credit to other lenders in the secondary market.

Question 3

Under the FATF Recommendations, what is the minimum period a financial institution must retain customer due diligence records after a business relationship ends?

Accepted Answer

Five years

Answer

FATF Recommendation 11 requires that financial institutions retain CDD records and transaction records for at least five years after the end of the business relationship.

Question 4

A US bank's international branch is subject to host-country regulations PRIMARILY because:

Accepted Answer

Host-country regulators have supervisory authority over operations within their jurisdiction

Answer

Even though a branch is part of the parent bank, host-country regulators assert supervisory authority over all banking activity conducted within their territory.

Question 5

Which instrument allows an exporter to receive immediate payment from its bank by discounting a time draft accepted by the importer's bank, with no recourse to the exporter?

Accepted Answer

Forfaiting

Answer

Forfaiting involves the purchase of medium-term trade receivables (usually guaranteed by bank avals or LCs) at a discount on a non-recourse basis.

(CBP) Certified Banking Professional Practice Test

(CBP) Certified Banking Professional Practice Test

CBP International Banking Practices 3