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Wednesday, August 01, 2018

CAIIB BFM Unit 6 Risks in Foreign Trade

More QUESTIONS WILL BE UPDATED LATER ON . CORRECT ME FOR ANY MISTAKE. HAPPY READING :)

1. A risk is:

(a) related to illness, which does not affect the human life.
(b) related to events which do not affect the profits of the organization.
( c) related to unplanned event with financial consequences resulting in loss.
( d) a certain event, where outcome is known.

Ans-c

2. ECGC full form?

Ans- Export Credit Gurantee Corporation

3.ECGC Ltd is owned by ?

GOI
RBI
Both
private organisation
Ans- GOI

4.International Trade is surrounded by various ..... due to buyers and sellers being located in different countries.


5.ERIC full form?

Ans- Export Risk Insurance  Corporation

6. A claim of ₹ 60 lacs have been settled by ECGC in favour of a bank against default of ₹ 80 lacs. Subsequently the bank realizes ₹ 20 lacs with the collaterals available to the loan. What is the loss suffered by the bank on this loan? 

a) ₹ 25 lacs 
b) ₹ 20 lacs 
c) ₹ 15 lacs 
d) ₹ 10 lacs

7.A claim of ₹ 49 lacs have been settled by ECGC in favour of a bank against default of ₹ 70 lacs. Subsequently the bank realizes ₹ 15 lacs with the collaterals available to the loan. What will be actual amount settled by ECGC after realization of security by the bank?
a) ₹ 49 lacs
b) ₹ 42.5 lacs
c) ₹ 38.5 lacs
d) ₹ 34 lacs

8. 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 compliance

9. Exchange Fluctuation Risk of ECGC:
(a) covers all exports payments up to six months period.
(b) covers 100 % exchange fluctuation of Indian exporters.
( c) covers exchange fluctuation above 2% and up to 50% only
(d) covers exchange fluctuation above 2% and up to 35% only.

10. Credit guarantees are on risk sharing basis, means that:
(a) The buyer and seller share the risk of default of any one of them.
(b) The buyer shares the defaulted amount with the insurance company.
(c) The seller shares the risk with the financier.
(d) The financier shares the risk with the insurance company.


11. General policies of ECGC do not cover:
(a) Commercial dispute between the buyers and the sellers.
(b) Insolvency of the buyer.
( c) Restrictions imposed by buyers country,
( d) Default by buyer to pay for goods already accepted.

12. Operational Risk does not occur if:
(a) Strike at the port.
(b) Non loading of gods on the desired ship, due to rains.
( c) Delay in supplies by sub-suppliers.
( d) Delay in payment by the buyers.


13.Movement in the price of home currency vis a vis a currency of invoice , would lead to ..

14. The guarantees given by ECGC, to cover loss on advances for incentives receivable by exporters at
pre-shipment stage, is called:
(a) Post-Shipment Export Credit Guarantee.
(b) Packing Credit Guarantee.
( c) Export Production Finance Guarantee.
( d) Export Finance Guarantee

15. Country Risk is when the _
(a) buyer or borrower is forbidden by the government to honour his commitment.
(b) Failure of counter party is called liquidity risk.
( c) Settlement Risk arise due to problems related to mismatch of funds or liquidity.
( d) Interest Rate risk arises with favourable movement of interest rates


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