Bfm mcqs

1. A company has four branches at Bangalore, Chennai, Delhi and Mumbai. IEC number should be
obtained by.
A. all bran ches simultaneously.
B. each branch separately.
C. any one branch, which c an be used by all branches.
D. the head office, which can be used by all branches.
ANSWER: D
2. An exporter who deals in multi products should get Registration-cum-Membership Certificate from.
A. all export promotion councils relevant to the products dealt in.
B. export promotion council nearest to the head office of the expo rter.
C. export promotion council of main line of activity or FIEO.
D. none of the above.
ANSWER: D
3. An exporter cannot obtain details about prospective buyers from.
A. yellow pages.
B. web sites.
C. Indian em bassy abroad.
D. none of the above.
ANSWER: D
4. A thorough buyer evaluation may be waived in case of.
A. buyers from advanced countries.
B. buyers from countries having bil ateral relations with India.
C. buyers having import licences.
D. transactions covered by full ad vance payment.
ANSWER: D
5. Force majuere clause in an export .
A. relates to penalty for non-fulfilm ent of contract.
B. exempts the exporter from liability from non-ful filment of contract due to reasons beyond his control.
C. provides for enforcing the contract compulsorily.
D. none of the above.
ANSWER: B
6. Obtaining quality certification is compulsory for.
A. export of commodities falling under mandator y inspection requirements of the government.
B. export of items meant for human consumption
C. all exports.
D. none of the above.
ANSWER: A
7. Booking of shipping space in advance is helpful to an exporter in.
.
A. saving in freight charges.
B. availing bank finance.
C. getting priority on inla nd movement of cargo by rail.
D. none of the above.
ANSWER: C
8. Under advance remittance as a method of payment the credit risk is borne by.
A. the importer.
B. the exporter.
C. importers ba nk
D. none.
ANSWER : A
9. Open account when used as a method of payment indicates.
A. the transactions are legal
B. the buyer has no money t o pay immediately.
C. the seller wants to sell desperately.
D. none of the above.
ANSWER: D
10. Open account method of payment is beneficial to
A. the buyer.
B. the seller.
C. the buying agent.
D. both the buyer an d the seller.
ANSWER: A
11. Cash on delivery method is normally used for.
A. bulk cargo with immediate market.
B. small but valuable items sent by po st.
C. slow moving items.
D. exports to countries with balance of payments problems.
ANSWER: B
12. Documents against payment term indicates
A. the documents are sent by post.
B. the export is risky.
C. the collecting bank will hand the documents to the buyer against payment.
D. the exporter delivers the documents to the bank against advance.
ANSWER: C
13. The best form of method of payment for an importer would be.
A. advance remittance.
B. letter of credit.
C. documents aga inst payment.
D. open account.
ANSWER: D
14. When goods are sent to an agent of an exporter in the importing country, the method of payment
adopted is.
A. open account.
B. letter of credit .
C. consignment sa le.
D. documents agains t acceptance.
ANSWER: C
15. The method of payment where the exporter relies on the undertaking of a bank to pay is.
A. bank guarantee.
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B. letter of credit.
C. letter of comfo rt.
D. none of the above .
ANSWER: B
16. Letter of credit transactions are generally governed by the provisions of.
A. Uniform customs and Procedures for Documentary Credits.
B. United Conference on Practices for Documentary Credits.
C. Uniform Customs and Practice for Documentary Credits.
D. Uniform Code and Procedure for Documentary Credits.
ANSWER: C
17. A letter of credit for a commercial transaction is.
A. a guarantee by the issuing bank to the exporter that bills drawn by the latter will be met.
B. undertaking by the issuing bank to the exporters bank that the exporters bills will be met by the
issuing bank.
C. undertak ing by the issuing bank to the exporter that documents conforming to the requirements of the
credit will be negotiated/paid against by the bank.
D. none of the above
ANSWER: C
18. The beneficiary under a letter of credit is.
A. the bank opening the credit.
B. the customer of the opening bank.
C. the confirming bank.
D. the exporter.
ANSWER: B
19. A letter of credit is opened on behalf of.
A. exporter customers.
B. importer customers.
C. any party wishing to make payment abroad.
D. none of the above.
ANSWER: B
20. A letter of credit is addressed to.
A. the beneficiary.
B. the negotiating bank.
C. the reimbursing bank .
D. the importer.
ANSWER: A
21. Bank B of Baroda nrgotiated on 12.3.2005 documents ynder a recovable letter of credit opened by
Bank C of California. On 13.3.2005 before the documents were dispatched by Bank B to Bank C, it
receives a notice from the latter, dated 11.3.2005 cancelling the letter of credit.
A. Bank B cannot get reimbursement from Bank C since the documents are n egotiated after the
cancellation of the letter of credit.
B. Bank B cannot get reimburse ment from Bank C, but have recourse to the exporter.
C. Bank B can get reimbursement from Bank C because the documents were negotiat ed before the
notice of cancellation could reach it.
D. Bank B can get reimbursement from Bank C since the notice of cancellation is invalid.
ANSWER: D
22. When a letter of credit does not indicate whether it is revocable or irrevocable, it is treated as.
A. revocable.
B. irrevocable .
C. revocable or irrevocable at the option of the beneficiary.
D. revocable or irrevocable at the option of the negotiating bank.
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ANSWER: B
23. Payment for bills drawn under letter of credit should be made by the negotiating bank.
A. immediately in all cases.
B. after the documents are a pproved by the issuing bank.
C. immediately or on a future date depending upon the te rms of credit.
D. only in foreign currency.
ANSWER: C
24. Under an acceptance letter of credit, the responsibility of the issuing bank is.
A. only to accept the bill.
B. to pay against the bill.
C. to accept the immediat ely and also to pay the amount of the bill on its due date.
D. to get the acceptance of the importer on the bill.
ANSWER: C
25. A confirmed letter of credit is one.
A. confirmed by a bank (other than t he opening bank) in the exporters country.
B. confirmed by the importer to be correct.
C. confirmed by the exporter that he agrees to the conditions.
D. confirmed to be authentic.
ANSWER: A
26. Under the confirmed letter of credit the undertaking the confirming bank is.
A. in addition to that of the opening bank.
B. in substitution of the undertaking of the opening bank.
C. subject to government policies to the exporter country.
D. none of the above.
ANSWER: A
27. A credit which provides for reinstatement of the amount as and when bills are drawn under it is called.
A. reinstatement credit.
B. reimbursement credi t
C. revolving credit.
D. back-to-back cre dit.
ANSWER: C
28. A transferable credit is one.
A. . which can be negotiated.
B. which can be transferred b y the importer to any other person.
C. which can be transferred by the beneficiary to any other perso n.
D. which provides for transfer of liability to another bank.
ANSWER: C
29. A transferable credit can be transferred.
A. once.
B. twice .
C. thrice.
D. any nu mber of times.
ANSWER: A
30. A transferable credit can be transferred to a third person in.
A. the same country.
B. a third country.
C. the same countr y or any third country.
D. none of the above.
ANSWER: C
.
31. A transferable letter of credit.
A. can be transferred to more th an one person even if partial shipment is prohibited.
B. can be transferred to more than one person only if partial shipment is allowed.
C. is one which contains words such as fractionable, assignable, etc.
D. . is transferred free of charge.
ANSWER: B
32. A back to back letter of credit.
A. is always an inland letter of c redit.
B. is a new letter of credit issued on th e strength of the letter of credit which is not transferable.
C. can be issued only when the original letter of credit is transferable.
D. can also be transferred.
ANSWER: B
33. A letter of credit that provides for granting of pre-shipment finance as well as storage of goods in the
name of the bank is.
A. a red clause let ter of credit.
B. a standby letter of credit.
C. a green clause letter of cr edit.
D. a secured letter of credit.
ANSWER: C
34. A letter of credit carries an undertaking of the opening bank to pay up to a specified amount in case of
non-performance of certain obligation by the applicant. This letter of credit is.
A. invalid.
B. an antic ipatory letter of credit.
C. standby letter of credit.
D. performance letter of cr edit.
ANSWER: C
35. The responsibility of an advising bank of a letter of credit is to.
A. vouch the genuineness of the letter of credit.
B. negotiate documents under the letter of credi t.
C. negotiate documents under the letter of credit, if the opening bank fails.
D. none of the above
ANSWER: A
36. Bank of Mumbai receives a bill under letter of credit opened by it. The importer instructs the bank not
to pay because he says the goods received are defective. The bank should.
A. return the bill with the reason payment refused.
B. seek clarification from the drawer; meanwhile k eep the bill with it.
C. refer the matter to International Chamber of Commerce.
D. make payment to the negotiating bank since the importe rs reason is untenable.
ANSWER: D
37. While scrutinizing the documents tendered under a letter of credit, the negotiating bank and issuing
bank should apply the doctrine of.
A. strict compliance
B. force majeure.
C. indemnity.
D. major com pliance.
ANSWER: A
38. Bank A has opened a letter of credit on behalf of its customers Imports India. When a bill under the
letter of credit is presented for payment by the negotiating bank it is found that Imports India do not have
sufficient balance in the account to pay the bill. The bank should.
A. intimate the negotiating bank by cable.
B. sue the customer for non-compliance w ith the letter of credit terms.

C. defer payment to the negotiating bank.
D. make payment to the negotiating bank immediately if documents are in order.
ANSWER: D
39. The expiry date of a letter of credit falls on 1st November, a bank holiday at exporters place.
A. The documents can be presented for negotiation the next working day.
B. The documents should be negotiated latest by the preceding working d ay.
C. Last date of negotiation and last date of shipment get postponed by a day.
D. The last date for shipment gets postponed but not the last date of negotiati on.
ANSWER: A
40. A letter of credit stipulates that the shipment should be made at the beginning og August 2005. It
means, the shipment can be made.
A. only on 1st August 2005.
B. during the first week of A ugust 2005.
C. any date between 1st and 10th of Aug ust 2005.
D. before the commencement of April 2005.
ANSWER: C
41. The letter of credit provides that shipment shall be made during the first half of February 2006. It
means the shipment can be made on any date between.
A. 1st and 4th of February 2006.
B. 1st and 15th of February 2006 .
C. 1st and 14th of February 2006; generally, with discretion to the negotiating bank to accept on 15th
February 2006 also.
D. 1st and 14th of February 2006; on 15th only if the port did not work on 14th.
ANSWER: B
42. If the letter of credit indicates the amount as about a specified amount, the drawing under the credit can
be.
A . 30% more than the specified amount.
B. 30% more or less than the Specified a mount.
C. 10% more than the specified amount.
D. 10% more or less than the specified a mount.
ANSWER: D
43. A letter of credit is opened for 100 kg of coffee for GBP 800. Documents for 102 kg of coffee for GBP
800 is presented for negotiation.
A. The bill cannot be accepted because quantity exceeds the letter of credit limit.
B. The bill cannot be accepted as the unit price get varied.
C. The bill can be accepted as it is beneficial to the import er.
D. The bill can be accepted since a tolerance of $5% in quant ity is allowed under UCP.
ANSWER: D
44. A teletransmission will be considered an operative instrument where.
A. it states full details to follow
B. it states mail confirmation w ill be the operating instrument.
C. it states airmailing our irrevocable letter of credit
D. none of the above.
ANSWER: D
45. A bank which issues a preliminary advice of issuance of an irrevocable credit.
A. A bank which issues a preliminary advice of issuance of an irrevocable credi t.
B. can later convert it as operative instrument.
C. may issue the operative instrument with dif ferent terms.
D. may issue the operative instrument with different terms.
ANSWER: A

46. A letter of credit is required to be completer and precise. It means.
A. it should not contain excessive details.
B. it should not refer to a previous credit w hich was amended.
C. both 1 and 2.
D. none of the a bove.
ANSWER: C
47. Expiry date of a letter of credit refers to.
A. the last date for shipment.
B. the last date for negotiatio n.
C. the last date for presentation of documents to issuing bank.
D. the last date of the month in which shipment can be made.
ANSWER: B
48. Unless otherwise required by the credit, the authentication of a document cannot be indicated by.
A. facsimile signature.
B. mark or stamp.
C. electronic meth od of authentication.
D. none of the above.
ANSWER: D
49. The obligation of the applicant of the credit to the beneficiary is.
A. to get the letter of credit opened confirming to terms of sale con tract.
B. to remain liable for the payment if the issuing bank fails to pay.
C. both 1 and 2 options.
D. only to get the credit opened.
ANSWER: C
50. Applicant for a letter of credit is not liable to the issuing bank.
A. for the charges of the issuing bank when collectable from the beneficiary, but he fails to pay.
B. actions of the intermediary bank.
C. the obligations imposed by foreig n laws and usages.
D. none of the above.
ANSWER: D
51. The responsibility of an accepting bank in a letter of credit is to.
A. accept bills drawn under the credit.
B. pay bills drawn under the credit.
C. accept and pay bills drawn under the credit.
D. accept the bill and get the payment from the issuing bank.
ANSWER: C
52. The responsibility of a negotiating bank is to.
A. verify that it negotiating only bills drawn und er credit advised by it.
B. the goods covered by the bill are safe and properly insured.
C. the documents tendered are as per the terms of credit.
D. both 2 and 3 above.
ANSWER: C
53. The responsibility of the confirming bank of a letter of credit is.
A. to negotiate and pay documents drawn under the credit.
B. vouchsafe the authenticity of the credit.
C. pay, if the issuing bank fails to pay docu ments that are in order.
D. pay, if the payment cannot be made by issuing bank due to gove rnment action.
ANSWER: A
54. Reimbursing bank under a letter of credit.
A. same as the issuing bank.
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B. the paying bank.
C. the bank from wh ich the negotiating bank can claim reimbursement.
D. branch of the issuing bank in the exporters country.
ANSWER: C
55. Under UCP, the banks involved in a letter of credit transaction are responsible for.
A. genuineness of documents submitted by the beneficiary.
B. non-fulfillment of obligations by the other banks.
C. delay in transmission of messages.
D. none of the above.
ANSWER: D
56. Under a letter of credit, the bill of exchange should be drawn on.
A. the issuing bank.
B. the issuing bank or any other bank as indicated in the credit.
C. the issuing bank or the importer as indicated in the credit.
D. any party as indicated in the credit.
ANSWER: B
57. As per Negotiable Instruments Act, the following will be a foreign bill.
A. A bill drawn in Mumbai on a party in New York and payable at Delhi .
B. A bill drawn in Chennai on a party in Kolkata and payable at Colombo .
C. A bill drawn in Bangalore on a party in Sydney and payable there.
D. none of the above.
ANSWER: C
58. As per UCP, the minimum amount for which marine insurance should be effected is.
A. FOB value.
B. CIF value.
C. FOB value plus 10%.
D. CIF value plus 10%.
ANSWER: D
59. The following document is not acceptable under a letter of credit unless specifically authorized by the
credit.
A. m arine insurance policy.
B. insurance document whic h specifies that the cover is subject to a excess.
C. certificate of insurance.
D. cover notes issued by br okers.
ANSWER: D
60. The currency in which the insurance policy is obtained should be the currency of .
A. the importers country.
B. the exporters country.
C. the letter of credit.
D. any country, which is easily exchangeable.
ANSWER: C
61. The date from which the marine insurance policy should be effective should be.
A. same as the date of the transport document.
B. same or later than the date of the transport d ocument.
C. same or earlier than the date of the transport documen t.
D. earlier than the date of the transport document.
ANSWER: C
62. General Average loss under marine insurance is.
A. the basis for calculation of premium.
B. losses suffered to compensate extraor dinary sacrifice made to save the property in common.

C. risks for which only average cost will be reimbursed.
D. none of the above.
ANSWER: B
63. Marine policy clause that currently gives widest coverage against risks is.
A. Institute Cargo Clause A.
B. Institute Cargo Clause B.
C. Institute Cargo Clause C.
D. All Risks Clause.
ANSWER: C
64. For Claiming under marine policy, the claimant should have insurable interest.
A. at the time of taking the policy.
B. when damage to or loss of good s occurs.
C. both at the time of taking the policy and o ccurrence of damage/loss.
D. either at the time of taking the policy or at the time of occurrence of damage/loss.
ANSWER: B
65. The description of goods in the following document should agree exactly with the description in the
letter of credit.
A. Bill of lad ing.
B. Commercial in voice.
C. Packing list.
D. all the above .
ANSWER: B
66. A certified invoice is one.
A. certified as correct by th e importers agent in the exporters country.
B. certified as correct by the consul of the importers country
C. certified as correct by Chamber of Commerce.
D. which includes a certificate of origin.
ANSWER: B
67. Certificate of origin indicates.
A. the country of shipment of g oods.
B. the place of manufacturer/product ion of goods.
C. the country of manufacturer/production of good s.
D. whether the product belongs to plant or animal ki ngdom.
ANSWER: C
68. Details about the exact contents of each package can be found in.
A. packing list.
B. packing cert ificate.
C. commercial invoice .
D. none of the above.
ANSWER: A
69. The following invoice does not evidence sale.
A. consular invoice.
B. certified invoice.
C. visaed invoice.
D. proforma invoi ce.
ANSWER: D
70. The following transport document is a document of title to goods.
A. bill of lading.
B. multimodal tr ansport document.
C. airway bill.
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D. none of the above.
ANSWER: A
71. A bill of lading is.
A. a non-negotiable instrument.
B. a quasi-negotiable.
C. fully negotiable ins trument.
D. partly negotiable instrument .
ANSWER: B
72. A mates receipt is.
A. Document signed by an officer of a vessel evidencing receipt of a shipment on board the vessel.
B. a substitute bill of lading.
C. bill of lading evidencing g oods carried on deck.
D. a draft bill of lading.
ANSWER: A
73. In a bill of lading the consignees name is mentioned as to order. It means the goods will be delivered to
the order of.
A. consign or.
B. the bank.
C. the consig nee.
D. the shipping ag ent.
ANSWER: A
74. As per UCP, unless specifically authorized in the letter of credit, a bank will not accept.
A. through bill of lading.
B. short form bill of ladin g.
C. bill of lading indicating t hat the carrying vessel is propelled by sail only.
D. none of the above.
ANSWER: D
75. In the absence of specific mention in the letter of credit, under UCP a transport document is considered
stale.
A. if presented for negotiation 21 days after its issue.
B. if presented for negotiation after its issue.
C. if presented after expiry of the letter of cre dit.
D. if presented for negotiation after the goods rea ch the destination.
ANSWER: A
76. A straight bill of lading is one.
A. covering both land and water transport.
B. the goods covered by which are delivera ble to the consignee.
C. which is sent directly to the consignee.
D. none of the above.
ANSWER: B
77. Freight to pay bill of lading is acceptable if.
A. the contact term is CIF.
B. the contract term is CFR .
C. the contract term is FOB.
D. goods are carried by a for eign vessel.
ANSWER: C
78. The drawback of non-negotiable sea waybill is.
A. . it does not evidence contract of affreightmen t.
B. it increases the incidence of fraud.
C. goods will not be delivered withou t the waybill even if indemnity is executed.
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D. the buyer cannot sell the goods in transit by surrendering a paper document to a new buyer.
ANSWER: D
79. The following transport document is acceptable under a letter of credit.
A. house air waybill
B. house bill of ladin g.
C. warehouse receipt.
D. tramp bill of lading .
ANSWER: A
80. According to the Multimodal Transportation of Goods Act, a multimodal transport document cannot
be.
A . a bearer instrument.
B. an order instrument.
C. a non-negotiable inst rument.
D. none of the above.
ANSWER: D
81. Air waybill is prepared in.
A. three originals.
B. quadruplicate.
C. as many copie s as required by the exporter.
D. one original only.
ANSWER: A
82. Incoterms cover.
A. trade in intangi bles.
B. ownership and trans fer rights.
C. contracts of carriage
D. rights and obligation s of parties to contract of sales.
ANSWER: D
83. The following incoterms cannot be used for contracts providing for transportation of goods by sea.
A. CFR.
B. DDP.
C. DES.
D. DEQ.
ANSWER : B
84. The incoterm providing least responsibility to seller is.
A. EXW.
B. DDP.
C. FOB.
D. CIF.
ANSWE R: B
85. The group of incoterms under which the sellers responsibility is to obtain freight paid transport
document for main carriage is.
A. E terms.
B. C terms.
C. D terms.
D. F terms.
ANSWER: B
86. The incoterm should indicate the place of shipment in case of.
A. F terms
B. E terms .
C. C terms.
D. Dterms.
ANSWER: A
87. Incoterm is specific about the responsibility for marine insurance in case of.
A. FOB and EXW.
B. FOB and CIF.
C. CIF and CIP.
D. CPT and DD P.
ANSWER: C
88. The importer under FOB terms requests the exporter to book shipping space on vessel convenient to
the exporter. The exporter.
A. is bound to book the shipping space as it is his duty under FOB term.
B. Should refuse the request as it is the duty of the importer to book the shipping space.
C. may accept the request, but cannot recover the additional cost from the importer.
D. may accept and execute the request at the cost of the importer.
ANSWER: D
89. The group of terms arranged in order of increasing responsibility of exporter is.
A. C, D, E and E terms.
B. D, E, F and C terms.
C. E, F, C and D terms.
D. F, C, E and D terms.
ANSWER: C
90. The price quoted by the seller for the product.
A. Will vary depending upon the incoterm chos en.
B. is irrespective of the incoterm.
C. Will be the base price; the effe ct of incoterm to be added later.
D. none of the above.
ANSWER: A
91. Adoption of incoterms is.
A. compulsory for all intern ational contracts.
B. compulsory for all letter of credit transacti ons.
C. optional for the parties to the contract.
D. mandatory for transactions with Europ e.
ANSWER: C
92. Packing credit is.
A. an advance mad e for packing goods for export.
B. pre-shipment finance for export.
C. a priority sector advance.
D. none of the above.
ANSWER: B
93. The amount of packing credit should not normally exceed.
A. the local cost of manufacture for the exporter.
B. FOB value of the export contract.
C. CIF value of the export contract.
D. The cost of manufacture or the F OB value of the export contract, whichever is lower.
ANSWER: D
94. The following person is not eligible for packing credit.
A. merchant exporter.
B. a person making de emed exports.
C. sub-supplier to manufacturer expo rter.
D. supplier to sub-supplier to manufactur er exporter.
.
ANSWER: D
95. The running account facility for packing credit is available for.
A. status holders only.
B. exporters of specifi ed goods.
C. exporters with good track rec ord.
D. exporters with orders above Rs.10 0 crores.
ANSWER: C
96. The advantage to the exporter of running account facility of packing credit is.
A. production of letter of credit or firm order is completely waived.
B. the period of facility need not be adhered to.
C. production of letter of credit or firm order is waived immediately; they must be produced within
reasonable time.
D. the rate of i nterest is low.
ANSWER: C
97. The exemption from the condition that packing credit should not exceed domestic cost of production is
not waived for.
A. commodit y eligible for duty drawback.
B. commodity imported under advance lic ence.
C. HPS groundnuts.
D. agro based produ cts like tobacco.
ANSWER: B
98. The substitution of commodity/fresh export for adjustment of packing credit is not available for.
A. advance against sensitive commodities.
B. transactions of sister/associate/group co ncerns.
C. exporters availing running account facility.
D. none of the above.
ANSWER: B
99. Normally the maximum period for which packing credit advances are made in.
A. 90 days.
B. 135 days .
C. 180 days.
D. 360 days.
ANSWER: C
100. A per-shipment advance is not expected to be adjusted by .
A. proceeds of export bill.
B. export incentives.
C. post shipment fina nce.
D. local funds.
ANSWER: D
101. A packing credit was granted against an export order, but the export could not take place.
A. It should be reported to Reserve Bank of India.
B. The exporter should be blacklisted
C. Claim should preferred with ECGC .
D. Interest at domestic rate should be ch arged on the advance from the date of advance.
ANSWER: D
102. For direct exporters, the packing credit should normally be granted only against.
A. a letter of credit.
B. firm order.
C. export licen ce.
D. a letter of credi t or firm order.
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ANSWER: D
103. For packing credit in rupees, the interest for the period up to 180 days is chargeable at.
A. BPLR minus 2.5%.
B. BPLR minus 3%.
C. not exceeding BP LR minus 2.5%.
D. . not less than BPLR minus 2.5%.
ANSWER: C
104. Pre shipment Credit in Foreign Currency is available for a period of.
A. maximum 180 days.
B. minimum 180 days.
C. maximum 270 days.
D. maximum 360 days.
ANSWER: A
105. Pre-shipment Credit in Foreign Currency can be availed in.
A. US dollar only.
B. The currency of export only.
C. The currency of import only.
D. any permitted currency.
ANSWER: D
106. Advising of letter of credit will be done by the bank.
A. only to its customers.
B. to any person provide d the letter of credit is issued by its correspondent bank.
C. free of charge to its customers and for a cost to others.
D. . to any beneficiary and from any issuing bank.
ANSWER: B
107. The following is not a post-shipment advance.
A. Negotiation of bill under letter of credit.
B. Purchase of foreign bill.
C. Advance against bill for collection.
D. None of the above.
ANSWER: D
108. A bill drawn under the letter of credit contains discrepancies.
A. the bank should refuse to negotiate the documents.
B. take the bill on collection basis only.
C. must negotiate irrespective of the dis crepancies.
D. may purchase it or take it for collection, but sho uld not refuse to handle the bill.
ANSWER: D
109. The following is a must for an exporter
A. IEC number.
B. Exporters cod e number allotted by Reserve Bank.
C. A minimum local turnover of Rs 50 lakhs.
D. an export licence.
ANSWER: A
110. An export to Pakistan by post parcel should be declared in.
A. GR form.
B. EP form.
C. PP form.
D. GRX For m.
ANSWER: C

111. Realization of export proceeds in a period of 15 months from the date of shipment is allowed in the
case of.
A. all consignment exports.
B. exports on deferred paym ents terms.
C. exports to Nepal.
D. exports to Indian owned warehouses in Europe.
ANSWER: D
112. Generally, on exports the proceeds are to be realized within.
A. six months from the date of shipment.
B. one year from the date of shipment.
C. six months from the date of negotiat ion of documents.
D. one year from the date of negotiation of documents.
ANSWER: A
113. Availment of post shipment credit in foreign currency is compulsory for.
A. exports who have not availed packing credit.
B. all exporters who have availed packing credit .
C. exporters who have availed pre-shipment cred it in foreign currency.
D. none.
ANSWER : C
114. Post-shipment credit in foreign currency can be availed by.
A. use of on-shore foreign currency funds.
B. banks raising foreign currency funds ab road.
C. exporters arranging funds abroad.
D. Any of the above methods.
ANSWER: D
115. Advance remittance from the importer can be accepted by an exporter in India provided
A. the advance does not carry interest payment.
B. shipment will be made only after one year fro m the date of receipt of advance payment.
C. the advance does not exceed 25% of the export value.
D. the rate of interest, if payable, does not exceed Libor p lus 1%.
ANSWER: D
116. A bank may refuse to accept an export bill for collection.
A. when the customer has sufficient limits under bill discoun ting facility.
B. when the documents have discrepancies as compared to letter of credit requirements.
C. when the documents are received from a non-customer.
D. none of the above.
ANSWER: C
117. If the importer refuses to accept the bill drawn on him the exporter.
A. should reimport the goods.
B. must find an alternate buye r.
C. may reimport or sell to altern ate buyer depending upon commercial expediency.
D. sue the importer.
ANSWER: C
118. If export cargo is lost in transit, the exporter should.
A. claim under marine insurance.
B. claim with ECGC
C. seek write off of p ost-shipment credit.
D. forseek refund of customs duty.
ANSWER: A
119. Deferred payment export is a form of.
.
A. sellers credit.
B. buyers credit.
C. mutual credit.
D. market credit.
ANSWER: A
120. Buyers credit takes the form of.
A. exporters bank financing the bu yer directly.
B. exporters bank financing the buyers bank
C. both (a) and (b) above.
D. neither (a) nor (b) abov e.
ANSWER: C
121. Deferred payment exports refer to contracts where.
A. payment is to be made by the importer over 3 years and above.
B. payment is to be made by the importer after 6 months from the date of shipment.
C. the export for which the exporter avails deferred payment credit
D. lending in international markets on long-term basis.
ANSWER: B
122. Working Group for approval of project exports does not include.
A. Reserve Bank of India.
B. Financing bank.
C. Exim bank.
D. DGFT.
ANSWER: D
123. For project exports fulfilling norms for period of credit, in principle sanction can be given by.
A. the financing bank.
B. Exim bank.
C. The financin g bank for contracts worth up to Rs 25 crores and Exim bank for contracts worth up to
RS 100 crores.
D. the financ ing bank for contracts worth up to Rs 100 crores and Exin bank for contracts worth up to
Rs 25 crores.
ANSWER: C
124. Export of services on deffered payment terms requires clearance of the Working Group for.
A. contracts beyond Rs 5 crores.
B. all contracts.
C. contracts bey ond 20 crores
D. contracts beyond 10 crores .
ANSWER: B
125. In case of failure of the exporter, the liability of the bank which has issued the performance guarantee
is to.
A. c ompel the exporter to fulfil his obligation.
B. find alternative contractor who can execute the contract.
C. financially compensate the beneficiary up to the value of the contract.
D. financially compensate the beneficiary up to the guaranteed amount.
ANSWER: D
126. Advance payment guarantee assures.
A. the beneficiary that the exporter will make advance payments.
B. the exporter that the importer will make advance payments.
C. the importer to refund the money he has advanced to the exp orter, if the latter fails.
D. the exporter that the bank will extend credit for the contract
ANSWER: C
.

127. Indian parties are prohibited from making investment in foreign entity engaged in the business of.
A. real estate.
B. real estate or banking.
C. real estate or banking or agriculture.
D. none of the above.
ANSWER: B
128. Export Credit Guarantee Corporation(ECGC) policies do not cover risk against.
A. buyers protracted default to pay for the goods.
B. war in buyers country.
C. buyers failure to obtain necessary import licence or exchange authorization from authorities in his
country
D. ca ncellation of export licence. Answer:C
ANSWER: C
129. The standard policy of ECGC covers risk of.
A. buyers failure to obtain import licence.
B. cancellation of import license in the bu yers country.
C. insolvency of the collecting bank.
D. all the above.
ANSWER: B
130. The standard policy of ECGC protects loss to the extent of.
A. 90% for political risk and 60% for commercial risk.
B. 90% for both political and commercial risks.
C. 60% for political risk and 90% for commerci al risk.
D. 60% for both political and commercial risks.
ANSWER: B
131. The maximum amount of claim against an individual buyer that ECGC will accept under its standard
policy issued to an exporter is known as.
A. maximum liability.
B. credit limit.
C. individual li mit.
D. there is no such ceiling.
ANSWER: B
132. The standard policy of ECGC is issued.
A. on whole turnover for 12 months.
B. on whole turnover basis for 24 mo nths.
C. against each consignment separately.
D. on monthly basis.
ANSWER: B
133. The Small Exporters Policy of ECGC is issued to.
A. any exporter in the SSI category.
B. any exporter who is exempt from excise duty.
C. an exporter with an anticipated turnover in the next 12 months not exceeding 1 crore.
D. an exporter with an anticipated turnover in the next 12 months not exceeding 25 lakhs .
ANSWER: D
134. Which of the following information about the Small Exporters Policy is wrong?
A. Risk coverage is 95% for commercial risk and 100 % for political risk.
B. The policy is issued for a period of 12 months.
C. The premium payable is lower than under the s tandard policy.
D. All the above.
ANSWER: D
.
135. Under its maturity factoring facility ECGC offers which of the following services?
A. Credit protection and sales ledger maintenance.
B. Credit protection, sales ledger maintenance and collection.
C. Financing exports.
D. Invoice discountin g and sales ledger maintenance.
ANSWER: B
136. The maturity factoring of ECGC protects the exporter against.
A. failure of the buyer to obtain authority as per the regulations o f his country.
B. risk normally covered by General Insurers.
C. failure of the buyer to pay.
D. none of the above.
ANSWER: C
137. Cover under the guarantee of ECGC is available to.
A. the bank against the default of the importer.
B. the bank against the default of the exporter.
C. the exporter against the failure of the export er.
D. the bank and the exporter against the failure of the buyer.
ANSWER: B
138. Pre-shipment advances granted in excess of the FOB value of contract in anticipation of duty
drawback can be covered under.
A. Packing Credit Guarantee.
B. Whole Turnover Packing C redit Guarantee.
C. Export Production Finance Guarantee.
D. Export Finance Guarantee.
ANSWER: C
139. . Export Finance(Overseas Lending) Guarantee of ECGC protects.
A. banks providing foreign currency loans to their correspondents.
B. banks providing foreign currency loans to contractors executing projects abroad.
C. overseas branches financing Indian exports.
D. none of the above.
ANSWER: B
140. Post-shipment advances against export incentives can be covered under.
A. Post-shipment Export Credit Guarantee.
B. Whole Turnover Post-shipment Credit G uarantee.
C. Export Production Finance Guarantee.
D. Export Finance Guarantee.
ANSWER: D
141. The rate of premium payable to ECGC for eligible advances covered under Whole Turnover Packing
Credit Guarantee is.
A. 6 paise per Rs 100 p.a. on daily average products.
B. 6 paise per Rs 100 p.m. on monthly average produ cts.
C. 6 paise per Rs 100 p.m. on yearly average products.
D. 6% per annum.
ANSWER: A
142. The risk to a bank in confirming a letter of credit is covered by ECGC under
A. Export Performance Guarantee.
B. Transfer Guarantee.
C. Export Finance Gua rantee.
D. none of the above.
ANSWER: B

143. Under Exchange Fluctuation Risk Cover, the ECGC provides cover.
A. to the exporters on deferred payment terms against exchange fluctua tions.
B. to banks for advances made in foreign currency to importers abroad.
C. to banks against advances for deferred payments exports.
D. none of the above.
ANSWER: A
144. . In case of exports to countries placed by ECGC in its restricted cover categories.
A. the risk will be covered by ECGC only if specific applications from exporters are approved by them.
B. The corporation will not cover the exports.
C. the risk will be covered on intimation to EC XGC.
D. none of the above.
ANSWER: A
145. The Board of Trade is.
A. a wing of the board of Directors in companies engaged in foreign trade.
B. the authority that appraises foreign investment in India.
C. a consultative and advisory body for the Government if India on foreign trade policy.
D. an organization of exporters from India.
ANSWER: C
146. Commodity Boards do not differ from Exports Promotion Councils in respect of the following.
A. Commodity Boards deal with problems relating to production also.
B. . Commodity Board is a statutory body.
C. Commodity Board covers a specific pro duct.
D. none of the above.
ANSWER: C
147. Which of the following organization does not specialize in training activity?
A. Indian Institute of Foreign Trade.
B. Indian Trade Promotion Organisa tion
C. Indian Institute of Packaging.
D. none of the above.
ANSWER: B
148. The institution specializing in organizing fairs and exhibitions is.
A. Indian Institute of Foreign Trade.
B. Federation of Indian Export Orga nisations.
C. Indian Trade Promotion Oraganisations.
D. none of the above.
ANSWER: C
149. Market Access Initiative is not available for.
A. conducting market studies.
B. participation in internationa l trade fairs.
C. testing charges for engineering products .
D. none of the above.
ANSWER: D
150. Market Development Assistance is available to.
A. exporters with annual turnover up to Rs 10 cror es.
B. exporters with annual turnover up to Rs 5 crores.
C. exporters with annual turnover above Rs 10 crore s.
D. all exporters.
ANSWER: A
.