Finastra Assessment Test Finastra Assessment Trade Finance 2

Question 1

A 'discrepancy' in trade finance refers to:

Accepted Answer

A document presented under an LC that does not conform to LC terms and conditions

Answer

A discrepancy occurs when documents presented under a Letter of Credit contain details that do not strictly comply with the credit's terms, potentially allowing the bank to refuse payment.

Question 2

What is the primary purpose of a Standby Letter of Credit (SBLC) in trade finance?

Accepted Answer

To function as a guarantee that the applicant will fulfill contractual obligations, with payment triggered only on default

Answer

An SBLC acts as a payment-of-last-resort guarantee; it is only drawn upon if the applicant fails to fulfill the underlying contractual obligation.

Question 3

Under UCP 600, banks have how many banking days to examine documents presented under a Letter of Credit and determine compliance?

Accepted Answer

5 banking days

Answer

UCP 600 Article 14 stipulates that banks have a maximum of five banking days following the day of presentation to determine compliance of documents.

Question 4

In trade finance, 'forfaiting' is best described as:

Accepted Answer

The non-recourse purchase of medium-to-long-term trade receivables at a discount by a forfaiter

Answer

Forfaiting involves a forfaiter purchasing trade receivables (typically bills of exchange or promissory notes) from an exporter on a non-recourse basis, removing credit and political risk.

Question 5

Which Finastra solution provides banks with open API connectivity to integrate trade finance workflows with corporate ERP systems and third-party platforms?

Accepted Answer

FusionFabric.cloud

Answer

FusionFabric.cloud is Finastra's open platform that provides APIs enabling banks and fintechs to integrate and build applications, including trade finance connectivity with corporate systems.

Finastra Assessment Test Practice Test

Finastra Assessment Test Practice Test

Finastra Assessment Test Finastra Assessment Trade Finance 2