Exam 2 Flashcards
While on the surface incoterms rules determine who pays what when, ultimately the __________ directly or indirectly pays the cost of transportation and international shipping
Importer
The choice of the incoterms rules is almost always the decision of the
Exporter
The choice of a proper incoterms rules is a critical decision because
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
In terms of cost and responsibility the easiest incoterms rule for the exporter which is in turn the most difficult for the importer is
Ex-works (Exw)
The incoterms rule FCA means
Free carrier
FOB is
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
Under the incoterms rule FOB, responsibility for the cargo
Shifts from exporter to importer when the goods are loaded onto the ship in the country from which the goods are leaving
Incoterms rules determine
Which task will be preformed by the exporter
The incoterms rule EXW specifies what regarding delivery
It lets the exporter decide when the goods are delivered
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
ALL OF THE ABOVE
a sea waybill
An air waybill
A multimodal bill of landing
The only incoterms rule which requires the importer to clear the merchandise for export from the country from which it is coming is
Ex-works
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
The importer
Under the cost insurance and freight incoterms rules
The insurance must total at least 110 percent of the value of the goods
One of the differences between the delivered at terminal incoterms rule and the delivery at place incoterms rules
The unloading cost are borne by the exporter under dap and by the importer under dat
Delivered at place is an incoterms rule designed specifically form
It can be used by any means of transportation
The FOB term not only means free on board, it is also sometimes reffered to as
Freight on board
Under the delivery duty paid incoterms rule, unloading cost are borne by the
Importer
Which incoterms rule requires the exporter to pay the importer duty
DDP
In a quote which includes multiple incoterms rules, so that the customer can choose, the incoterms rule that has the highest invoiced amount is
DDP
Among the following, the most consumer friendly incoterms rule is
DAP
Certain countries do not allow importers to purchase insurance abroad. Which incorterms rule is therfore not available to importers located in these countries
CIP
The incoterm DAP specifies what regarding delivery
Who unloads the goods from the means of conveyance
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
Ex-works
Delivered at terminal is an incoterm designed specifically for
Containerized transportation
The risk that an exporter takes in requesting cash in advance as a means of payment is
It puts the exporter at a competitive disadvantage
An exporter can conduct its international business in a manner similar to the way it and most companies conduct domestic business by using
An open letter
The importers bank is called the
Issuing bank
The instruction letter is part of the documentary collection
In which the exporter, through the remitting bank, tells the present bank what it is expected to accomplish
A standby letter of credit is similar to a simple letter of credit except for
It usually applies to more than one shipment from the exporter to the importer
In valuing a currency the direct auote is
The value of the foreign currency expressed in units of the domestic currency
Market based forecasting of exchange rates
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
A forward market hedge
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
The risk resulting from possible fluctuations in currency exchange rates is called
Transaction exposure
Stable countries representing the greatest percentage of the world trade all have ______ currencies
Floating
Incoterms rules stands for
International commerce terms
A typical container will be handled ______ times in each of the ports departure and destination
Four to six
The biggest hazard for containerships is
Fire
Most of the ships that sink each year
ALL OF THE ABOVE
are older ships
Are bulk ships
Are ships flying third world countries’ flags
The part of the trip during which cargo is at most risk for theft is
The inland leg
Marine cargo insurance can be purchased from
Freight forwarder
Premiums in an open ocean cargo policy
Are based upon the value of shipments made under the policy
A special cargo policy
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
A letter of credit usually requires
A certificate of insurance
The liability of a single P&I club is limited to
$7 million
Coverage a of the institute marine cargo clauses requires a special endorsement to cover
Strikes and other civil disturbances
Coverage a of the institute of marine cargo clauses is the maximum coverage an exporter or importer would normally need to purchase
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
Goods shipped under deck
Are stowed inside the ship
Institute for marine cargo clauses coverage b
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
Under american conditions free of particular average policy
None of the above
A sue and labor clause
Directs the shipper to act in the best interest of the insurance company when a loss occurs
Airfreight insurance policies
Are written as all risk policies
At lloyds the individuals assuming (insuring) risk are grouped together in
None of the above
Ar lloyds the individuals assuming (insuring) risk have
Unlimited liability
What kind of companies decide not to purchase insurance for international transportation risk?
Very large international traders with many shipments
The united states export policy is mostly concerned about
Keeping some military technologies away from some countries
A product not on the commerce control list or whose export control classification number does not call for an export license is classified as
None of the above
The pro forma invoice
Must be written with extreme care to avoid discrepancies between the letter of credit and the commercial invoice
The sentence this merchandise is licensed by the united states for ultimate destination [country]. Diversion country to US law prohibited is
None of the above
Besides a contract and a receipt for goods an ocean bill of landing is
A certificate of title
Deadweight tonnage
Is the maximum weight of cargo that a vessel can carry
In contanerized shipping the term TEU stands for
Twenty foot equivalent unit
Ships too large to pass through the panama canal are called
Post panamax ships
Countires with an open registry often provide
Flags of convenience
Break bulk ships
Can call at just about any port to pick up different kinds of cargo loads
