Master the Art of Financing International Trade
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Questions and Answers

Which of the following is NOT a common method of financing international trade?

  • Cash in advance
  • Letters of credit
  • Bartering (correct)
  • Trade credit

    • What is the primary purpose of using letters of credit in international trade?

  • To negotiate favorable trade terms
  • To secure a loan for the importer
  • To provide a guarantee of payment to the exporter (correct)
  • To facilitate currency exchange

    • Which of the following is a disadvantage of using cash in advance as a method of financing international trade?

  • Lack of flexibility in payment terms
  • Currency exchange rate fluctuations
  • Risk of non-payment by the importer
  • Lengthy processing time (correct)

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