Chapter 10 International Banking

Question 0

Letter of credit

Answer 0

Is an instrument given by a bank on behalf of the buyer applicant to pay the bank of the seller beneficiary a given sum in any given time provided that documents required by the letter are presented to the issuing bank

Question 1

Foreign exchange rate

Answer 1

Is the value of one currency in terms of another

Question 2

Money laundering

Answer 2

Paper trail for currency so that people could not deposit invest or exchange money in such a way as to conceal it’s illegal source

Question 3

Country risk

Answer 3

The term of entire range of political legal social and economic conditions that may put international business at risk

Question 4

Currency risk

Answer 4

The risk posed by variations in the exchange rates between countries

Question 5

Corresponded Banks

Answer 5

Ask as points of contact for another banks that do not have a branch agency subsidiary or corporation in the host country

Question 6

Edge corporations or agreement corporations

Answer 6

Are financial corporations that are federally chartered and allowed to engage only an international banking or other financial transaction related to international business

Question 7

Sovereign wealth fund

Answer 7

When the government of a country has excess cash to manage the government may create Sovereign wealth fund