Exam 2

Question 1

While on the surface incoterms rules determine who pays what when, ultimately the __________ directly or indirectly pays the cost of transportation and international shipping

Answer 1

Importer

Question 2

The choice of the incoterms rules is almost always the decision of the

Answer 2

Exporter

Question 3

The choice of a proper incoterms rules is a critical decision because

Answer 3

ALL OF THE ABOVE
It can be an integral part of export strategy
It is linked to the level of customer service the firm is attempting to provide
It can be a competitive advantage

Question 4

In terms of cost and responsibility the easiest incoterms rule for the exporter which is in turn the most difficult for the importer is

Answer 4

Ex-works (Exw)

Question 5

The incoterms rule FCA means

Answer 5

Free carrier

Question 6

FOB is

Answer 6

ALL OF THE ABOVE
free on board
An incoterms rule that can be used for any merchandise
An incoterms rule specifically designed for ocean transport

Question 7

Under the incoterms rule FOB, responsibility for the cargo

Answer 7

Shifts from exporter to importer when the goods are loaded onto the ship in the country from which the goods are leaving

Question 8

Incoterms rules determine

Answer 8

Which task will be preformed by the exporter

Question 9

The incoterms rule EXW specifies what regarding delivery

Answer 9

It lets the exporter decide when the goods are delivered

Question 10

The document that corresponds clearly to the transfer of responsibility for a free carrier shipment is the receipt given by the carrier to the exporter. This receipt can be

Answer 10

ALL OF THE ABOVE
a sea waybill
An air waybill
A multimodal bill of landing

Question 11

The only incoterms rule which requires the importer to clear the merchandise for export from the country from which it is coming is

Answer 11

Ex-works

Question 12

Under the free on board incoterms rule if a piece of cargo breaks loose while it is loaded onto the ship it becomes the responsibility of

Answer 12

The importer

Question 13

Under the cost insurance and freight incoterms rules

Answer 13

The insurance must total at least 110 percent of the value of the goods

Question 14

One of the differences between the delivered at terminal incoterms rule and the delivery at place incoterms rules

Answer 14

The unloading cost are borne by the exporter under dap and by the importer under dat

Question 15

Delivered at place is an incoterms rule designed specifically form

Answer 15

It can be used by any means of transportation

Question 16

The FOB term not only means free on board, it is also sometimes reffered to as

Answer 16

Freight on board

Question 17

Under the delivery duty paid incoterms rule, unloading cost are borne by the

Answer 17

Importer

Question 18

Which incoterms rule requires the exporter to pay the importer duty

Answer 18

DDP

Question 19

In a quote which includes multiple incoterms rules, so that the customer can choose, the incoterms rule that has the highest invoiced amount is

Answer 19

DDP

Question 20

Among the following, the most consumer friendly incoterms rule is

Answer 20

DAP

Question 21

Certain countries do not allow importers to purchase insurance abroad. Which incorterms rule is therfore not available to importers located in these countries

Answer 21

CIP

Question 22

The incoterm DAP specifies what regarding delivery

Answer 22

Who unloads the goods from the means of conveyance

Question 23

As a revision in 2010, the only incoterm which requires the importer to clear the merchandise for export from the country from which it is coming is

Answer 23

Ex-works

Question 24

Delivered at terminal is an incoterm designed specifically for

Answer 24

Containerized transportation

Question 25

The risk that an exporter takes in requesting cash in advance as a means of payment is

Answer 25

It puts the exporter at a competitive disadvantage

Question 26

An exporter can conduct its international business in a manner similar to the way it and most companies conduct domestic business by using

Answer 26

An open letter

Question 27

The importers bank is called the

Answer 27

Issuing bank

Question 28

The instruction letter is part of the documentary collection

Answer 28

In which the exporter, through the remitting bank, tells the present bank what it is expected to accomplish

Question 29

A standby letter of credit is similar to a simple letter of credit except for

Answer 29

It usually applies to more than one shipment from the exporter to the importer

Question 30

In valuing a currency the direct auote is

Answer 30

The value of the foreign currency expressed in units of the domestic currency

Question 31

Market based forecasting of exchange rates

Answer 31

ALL OF THE ABOVE Is based on the premise that the market knows best Attempts to capture the collective knowledge of sophisticated speculators in the future spot rate of a currency Does not take into account government interaction

Question 32

A forward market hedge

Answer 32

ALL OF THE ABOVE Allows a company to protect itself from currency fluctuations May involve selling forward a future receivable in a foreign country May involve purchasing forward the currency necessary to cover a foreign payment

Question 33

The risk resulting from possible fluctuations in currency exchange rates is called

Answer 33

Transaction exposure

Question 34

Stable countries representing the greatest percentage of the world trade all have ______ currencies

Answer 34

Floating

Question 35

Incoterms rules stands for

Answer 35

International commerce terms

Question 36

A typical container will be handled ______ times in each of the ports departure and destination

Answer 36

Four to six

Question 37

The biggest hazard for containerships is

Answer 37

Fire

Question 38

Most of the ships that sink each year

Answer 38

ALL OF THE ABOVE are older ships Are bulk ships Are ships flying third world countries' flags

Question 39

The part of the trip during which cargo is at most risk for theft is

Answer 39

The inland leg

Question 40

Marine cargo insurance can be purchased from

Answer 40

Freight forwarder

Question 41

Premiums in an open ocean cargo policy

Answer 41

Are based upon the value of shipments made under the policy

Question 42

A special cargo policy

Answer 42

ALL OF THE ABOVE is an insurance policy that covers only one shipment Allows a firm to purchase coverage that specifically fits a particular shipment Results in cumbersome efforts to purchase insurance for each shipment

Question 43

A letter of credit usually requires

Answer 43

A certificate of insurance

Question 44

The liability of a single P&I club is limited to

Answer 44

$7 million

Question 45

Coverage a of the institute marine cargo clauses requires a special endorsement to cover

Answer 45

Strikes and other civil disturbances

Question 46

Coverage a of the institute of marine cargo clauses is the maximum coverage an exporter or importer would normally need to purchase

Answer 46

ALL OF THE ABOVE for most trade lanes of the world For shipments from one developed country to another For shipments that stay away from politicsl hot spots of the world

Question 47

Goods shipped under deck

Answer 47

Are stowed inside the ship

Question 48

Institute for marine cargo clauses coverage b

Answer 48

ALL OF THE ABOVE Is a named-perils policy Includes coverage for goods washed overboard Includes coverage for water damage and total losses during loading and unloading

Question 49

Under american conditions free of particular average policy

Answer 49

None of the above

Question 50

A sue and labor clause

Answer 50

Directs the shipper to act in the best interest of the insurance company when a loss occurs

Question 51

Airfreight insurance policies

Answer 51

Are written as all risk policies

Question 52

At lloyds the individuals assuming (insuring) risk are grouped together in

Answer 52

None of the above

Question 53

Ar lloyds the individuals assuming (insuring) risk have

Answer 53

Unlimited liability

Question 54

What kind of companies decide not to purchase insurance for international transportation risk?

Answer 54

Very large international traders with many shipments

Question 55

The united states export policy is mostly concerned about

Answer 55

Keeping some military technologies away from some countries

Question 56

A product not on the commerce control list or whose export control classification number does not call for an export license is classified as

Answer 56

None of the above

Question 57

The pro forma invoice

Answer 57

Must be written with extreme care to avoid discrepancies between the letter of credit and the commercial invoice

Question 58

The sentence this merchandise is licensed by the united states for ultimate destination [country]. Diversion country to US law prohibited is

Answer 58

None of the above

Question 59

Besides a contract and a receipt for goods an ocean bill of landing is

Answer 59

A certificate of title

Question 60

Deadweight tonnage

Answer 60

Is the maximum weight of cargo that a vessel can carry

Question 61

In contanerized shipping the term TEU stands for

Answer 61

Twenty foot equivalent unit

Question 62

Ships too large to pass through the panama canal are called

Answer 62

Post panamax ships

Question 63

Countires with an open registry often provide

Answer 63

Flags of convenience

Question 64

Break bulk ships

Answer 64

Can call at just about any port to pick up different kinds of cargo loads