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

Under CIF, the seller bears costs and risk until the goods arrive at the named destination port, but import duties remain the buyer's responsibility.

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

A transferable LC explicitly permits the beneficiary to assign all or part of the credit to another party, enabling supply chain financing.

Question 3

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

Accepted Answer

MT 103

Answer

MT 103 is the SWIFT message for single customer credit transfers, commonly used for cross-border wire payments.

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

PPP holds that exchange rates will adjust so that identical goods cost the same across countries, driven by relative inflation differentials.

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

Notional pooling calculates interest on the net aggregated balance across all participating accounts without physically moving funds.

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