CE CE Export Financing & Risk Management 2

Question 1

What is 'country risk' in the context of export financing?

Accepted Answer

The probability of financial loss due to political or economic instability in the buyer's country

Answer

The cost of shipping to distant markets

Answer

The tariff rate applied by the importing country

Answer

The exchange rate between two countries

Question 2

Which SBA program provides loan guarantees specifically to small businesses seeking to export goods or services?

Accepted Answer

SBA Export Working Capital Program

Answer

SBA 7(a) Standard Loan

Answer

SBA Disaster Loan Program

Answer

SBA Microloan Program

Question 3

What is forfaiting in international trade finance?

Accepted Answer

The purchase of medium-term receivables from exporters at a discount on a non-recourse basis

Answer

Abandoning an export shipment at the border

Answer

A penalty for late delivery

Answer

Forfeiting export rights to a licensee

Question 4

Which payment term carries the MOST risk for the U.S. exporter?

Accepted Answer

Open account

Answer

Cash in advance

Answer

Confirmed letter of credit

Answer

Documentary collection (D/P)

Question 5

What does 'recourse' mean in export factoring?

Accepted Answer

The factor can return unpaid receivables to the exporter if the buyer defaults

Answer

The exporter can cancel the sale after shipping

Answer

The buyer has the right to return defective goods

Answer

The bank can seize the exporter's assets

Question 6

Which EXIM Bank product is best suited for a small U.S. exporter needing to cover a single large export transaction against buyer default?

Accepted Answer

Single-buyer export credit insurance

Answer

Multi-buyer umbrella policy

Answer

Working capital loan guarantee

Answer

Direct loan to foreign buyer