1. The most secure of payment for an exporter is a(n):

1. Open account transaction
2. Factoring transaction
3. Consignment sale
4. Irrevocable letter of credit

2. What is a Letter of Credit?

1. An instrument issued by the importer’s bank at the request of the importer which guarantees payment to the exporter provided the merchandise is shipped in accordance with precise instructions.
2. A way to establish and maintain a credit card purchase.
3. An instrument issued by the exporter’s bank that allows the importer to legally import the product into the host country.
4. An instrument of currency issued by a foreign government to the exporter

3. The major reason for the use of countertrade is the ready availability of foreign exchange in some developing countries. True/False?

1. True
2. False

4. With an ethnocentric pricing strategy the firm sets one worldwide price and country managers have no latitude to change it. True/False?

1. True
2. False

5. In the development of export prices what does CIF stand for?

1. Cost in foreign countries
2. Cost of importing foreign products
3. Cost, insurance and freight
4. Cost, interest and foreign exchange