Certified Treasury Professional Exam Foreign Exchange and International Treasury 2

Question 1

Which Incoterm makes the seller responsible for delivering goods to a named destination port, cleared for export but not import?

Accepted Answer

CIF (Cost, Insurance, Freight)

Answer

DDP (Delivered Duty Paid)

Answer

EXW (Ex Works)

Answer

FOB (Free on Board)

Question 2

A letter of credit (LC) that allows the beneficiary to transfer part of the credit to one or more secondary beneficiaries is called a:

Accepted Answer

Transferable LC

Answer

Revolving LC

Answer

Standby LC

Answer

Back-to-back LC

Question 3

Which SWIFT message type is used for sending a customer credit transfer (cross-border payment)?

Accepted Answer

MT 103

Answer

MT 202

Answer

MT 940

Answer

MT 700

Question 4

The purchasing power parity (PPP) theory suggests that exchange rates between two countries should adjust to reflect differences in:

Accepted Answer

Inflation rates

Answer

Interest rates

Answer

GDP growth rates

Answer

Trade balances

Question 5

In a notional pooling arrangement for a multinational company, interest is calculated on the:

Accepted Answer

Net combined balance of all accounts in the pool

Answer

Gross balance of each account

Answer

Weighted average balance of all pools

Answer

Highest single account balance

Question 6

Which country risk component specifically captures the likelihood that a foreign government will impose restrictions on currency conversion or cross-border fund transfers?

Accepted Answer

Transfer risk

Answer

Sovereign risk

Answer

Political risk

Answer

Credit risk