CE CE Export Financing & Risk Management

Question 1

Which U.S. government agency provides export financing and loan guarantees to help American exporters compete globally?

Accepted Answer

Export-Import Bank of the United States (EXIM)

Answer

The Export-Import Bank of the United States (EXIM) is the official export credit agency that provides financing, loan guarantees, and insurance to support U.S. exporters.

Question 2

What type of export financing arrangement allows a foreign buyer to defer payment while the U.S. exporter receives funds immediately through a bank?

Accepted Answer

Banker's acceptance

Answer

A banker's acceptance is a time draft drawn on and accepted by a bank, allowing exporters to receive immediate payment while buyers receive short-term credit.

Question 3

Which type of insurance protects U.S. exporters against non-payment by foreign buyers due to commercial or political risks?

Accepted Answer

Export credit insurance

Answer

Export credit insurance protects exporters from losses due to buyer insolvency, protracted default, or political events that prevent payment.

Question 4

What is the term for the risk that exchange rate fluctuations will negatively impact the value of an export transaction?

Accepted Answer

Foreign exchange (FX) risk

Answer

Foreign exchange risk arises when the currency of payment differs from the exporter's home currency and exchange rates move unfavorably before settlement.

Question 5

Which financial instrument allows an exporter to lock in an exchange rate for a future transaction, eliminating FX risk?

Accepted Answer

Forward exchange contract

Answer

A forward exchange contract fixes the exchange rate for a currency transaction at a future date, protecting the exporter from adverse rate movements.

(CE) Certified Exporter Practice Test

(CE) Certified Exporter Practice Test

CE CE Export Financing & Risk Management