UNIVERSITY OF BANKING HO CHI MINH CITY FINAL EXAM (90 MINUTES) SCHOOL OF BANKING TEST 02
Course: International Payment (BAF307_201_5 L03 TA)
Class code: MAG310 201 5 L03
S†udenf name: Student ID number: * Instructions to Candidates:
This exam includes 20 multiple choice questions and a case study All answers to the multiple-choice questions must be marked on the answer sheet (01) while those of the case study must be written
on the answer sheet (02) These answer sheets have been attached to this test
Make sure that you have 8 pages including this page
Students can use any material (in the paper format) to complete the questions
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Remark: Please tick (X) against the correct choice and cross ( @) against the wrong choice and fill in the circle (®) if you choose it again
Choose the best answer from the following multiple-choice questions, 0.25 points for each question 1 Which of the following is TRUE of a letter of credit? It is a shipping document Issued by a bank ao œ®œp on the importer
At the request of the exporter
The bank agrees to honor a draft drawn
2 If payment is to be made at the time that
Trang 23 How does a T/T payment method work? a Payment is held by the bank until items
are shipped
b Items are delivered, then payment is
made through SWIFT
¢ Payment is made first, then items are shipped
d Payment is made to a_third- -party distributor,
In which of the following circumstances
might the seller choose to use an
irrevocable confirmed L/C?
a The buyer’s country is politically unstable
b The buyer is creditworthy but has a
record of slow payment
ce There are some buyer risks, but there is a market for the goods in the buyer’s country
d Any of them
Which of the following is NOT considered
as an acceptable way of indicating the
maturity date of a term bill under the LC? Assume the bill was drawn on 18 June 2020 a At 30 days after sight, pay b On 30" May 2020, pay c 30 days after the arrival of goods, pay d 30 days after B/L date 12'" December 2020, pay
If payment is made by T/T in advance
which specifies in a sale contract, which of the following statement can fit the
requirement?
a Payment is made to the exporter before
the goods are delivered
b Payment is made to the exporter after
the goods are delivered
c Payment is made to the exporter after
the importer receives the goods d, None of them
A DC calls for the presentation of an Insurance Certificate Which of the following insurance documents would be
acceptable for CIP shipment where the invoice value is USD 75,000?
(i) Insurance Certificate for USD 82,500
8
(ii) Insurance Policy for USD 85,000 (iii)Insurance declaration under open over
for USD 75,000
(iv)Insurance Certificate for USD 75,000
a (i) and (ii) only
b (i) and (iv) only
(ii) and (iii) only
d (iii) and (iv) only
A letter of credit has an expiry date of 28" May and the latest shipment of 7"" May, No
presentation period i is specified The goods
are shipped on 34 May What is the latest date for the presentation of documents? a 17 May
b 18” May c 24 May d 28 May
In this type of payment methods, all shipping documents including _ title
documents are handled by banks The
involved banks release documents to the buyers only on payment of the goods a Clean collection b Consignment c Documentary collection (Documents against Payment) d Documentary collection (Documents against Acceptance)
10 In a sale contract, there are an exporter in Vietnam and an Importer in the USA
Which of these Incoterms could apply: (i) CFR Vietnam
(ii) FOB New York
(iii) CIF New York a Only (i) b (i) and (iii) c Only (iii) d Any of them 11 L/C states: “41D: AVAILABLE WITH: ANY BANK BY NEGOTIATION” This means:
a The issuing bank nominated a specific
bank as a negotiating bank
b The issuing bank allowed any bank to transfer the L/C
c The issuing bank allowed any bank to
Trang 3d Any of them 12 L/C states:
“41D: Available with bank X by sight
payment.”
“42D; Drawee: issuing bank” What is bank X responsible for?
a Bank X will advance funds to the
beneficiary if the complying documents are presented
b Bank X will make full payment to the
beneficiary if the complying documents are presented
c Bank X will accept to pay at the maturity
date if the complying documents are presented
d None of them
13 East Bank sends a collection on behalf of
one of the exporters to their correspondent,
West Bank West Bank passes it on to the
importer bank, South Bank South Bank contacts the importer and requests
payment How many collecting banks are there? a One b Two c Three d, None of them
14 Bank X in Vietnam is maintaining an
account in US Dollars with American Express Bank, USA From Bank X’s
perspective, the account in US dollars is known as: a Vostro account b Nostro account c Escrow account d Current account
18 Which party has the most responsibility to
examine the terms and conditions of a
Documentary Credit against the sales agreement? a Applicant b Beneficiary © Issuing Bank d Confirming Bank 16, In a collection, who is the principal? a The exporter b The importer 17, 19 20
c The exporter’s bank d The importer’s bank
Which one of the following International Chamber of Commerce (ICC) Publication
governs dealing in documentary collections? a URC522 b UCP600 c URR725 d ISBP681
A company wishes to import food items for distribution to wholesale traders In its
excellent contacts, it’ll receive full
payment once goods are shipped to the wholesale traders Which payment method would suit it best?
a Cash in advance
b Documentary Collection (sight bills)
¢c Documentary collection (60 days term
bill)
d A letter of credit (payable at sight) Bank X will receive a Letter of Credit opened by Bank Y The confirmation instruction indicates that the Advising bank must add their confirmation to the
L/C However, Bank X is not prepared to
add their confirmation to the L/C Which
of the following should be Bank xX’s
action?
a Advise the L/C to Beneficiary without
adding the confirmation
b Return the L/C to Bank Y
ce Advise the L/C to Beneficiary without adding the confirmation and inform Bank Y without any delay
d None of them
Irrevocable confirmed credit can not be canceled or amended without the agreement of ., a Beneficiary, Confirming Bank, Issuing Bank, Applicant b Applicant, Beneficiary, Issuing Bank, Advising Bank c Beneficiary, Confirming
Applicant, Advising Bank
d Advising Bank, Beneficiary, Issuing Bank, Confirming bank
Trang 4PART 2: CASE STUDY (5 MARKS)
On December 15, 2020, DE GROOT co Ltd Received an L/C with terms and conditions as follows:
Swift Input: MT 700 Issue of a Documentary credit
Sender bank: ASCBVNVXXX
ASIA COMMERCIAL BANK VIETNAM Sent to: BOKRKRSE
BANK OF KOREA
‘27: Sequence of total: 1/1
40A; Form of documentary credit: Irrevocable
20: Documentary credit number: LCIH01100033
31C: Date of issue: 201114
40E: Applicable rules: UCP Latest Version
31D: Date and Place of expiry: 201221 in Korea
50: Applicant: Viet Tin Import and Export and Trading Company Limited
156 Khuat Duy Tien, Nhan Chinh, Thanh Xuan district, Hanoi, Vietnam 59: Beneficiary: DE GROOT Co Ltd
231 Lea Dea Gong str, Dist.13, Busan Korea 32B: Currency code, amount: USD 214,000.00
309A: Percentage credit amount tolerance: 10/10 41D: Available with/by: Any bank by negotiaton
42C: Draft at: 60 days after B/L date for 100 pet of the invoice value in duplicate
42A: Drawee: issuing bank 43T: Transshipment: prohibited
44E; Port of loading: any port in Korea
AAF: Port of discharge: Haiphong port, Vietnam
44C: Latest date of shipment: 201206
45A; Description of goods: - Name of goods: H —- Beam
- Total Quantity: 1000 MT (+/- 10%)
- Unit price: USD 214 per MT FOB Busan port Korea - Total amount: USD 214,000.00 (+/- 10%)
- Trade term: FOB Busan port Korea (Incoterms 2010) 46A; Documents required
1 Signed commercial invoice for 100PCT in 03 originals
2 Full (3/3) set of original clean shipped on board ocean bill of lading made out to order of Asia Commercial Bank Vietnam, marked freight collect notify the name and address of the applicant
3 Certificate of origin issued by the authorized association of Hong Kong in 03 originals 48; Period for presentation:
All documents must be presented within 15 days after the shipment date but within the validity of the credit
40: Confirmation instructions: without
Trang 5Required:
1 Specify all parties involved in the L/C as mentioned earlier
2 Explain with the flow chart of how DE GROOT co Ltd will execute the L/C as mentioned earlier 3 Indicate the correct format of Bill of Exchange under the L/C as mentioned earlier (assume that
DE GROOT Co Ltd is going to submit an invoice of 214,000USD to Bank of China Busan Branch) 4, What types of risks (if any) might ASIA COMMERCIAL BANK VIETNAM and its customer face? an
Explain the discrepancies relating to the following B/L as presented for the above LC Consignor (Name, Address, Country) DE GROOT Co Ltd 231 Lea Dang Gum str, Dist.13, Incheon, Korea B/L no and Date DS01-01256 DECEMBER 06, 2020 FBL NEGOTIABLE FIATA MULTIMODAL TRANSPORT BILL OF LADING
Issued sbject to UNCTAD/ICC Rules for
Multimodal Transport Documents (ICC Punblication 48 1) 156 HANG MA, TAY HO DISTRICT, HANOI, VIETNAM
Consignee Carrier (Name, Address, Country) TO THE ORDER OF ASIA COMMERCIAL | EVERGREEN LINES KOREA
BANK VIETNAM AAA Na:
E VER GR EEN
Notify Party Ref No:
VIET TIN IMPORT AND EXPORT AND 12098/20/202012 TRADING COMPANY LIMITED Place of Receipt
Vessel Port of Loading Transshipment to
ASIAN GYRO '022S | BUSAN, KOREA SINGAPORE
Port of discharge Final destination Haiphong port, Vietnam Haiphong port, Vietnam
Marks & Number of Goods Gross weight Measurement
numbers packages description
BEAM/153298/0 | 2 CONTAINERS BEAM_H 1000 MT 20FT ON BOARD December 08 2020 Documentary Credit number: LCIH 1234561789 Dated NOVEMBER 14, 2020 Freight instructions
FREIGHT PREPAID 21 Place and date of issue: Busan, DECEMBER 06, 2020
Stamp and signature of carrier
On behalf of Evergreen Lines
M Will
Trang 6FINAL EXAM (90 MINUTES)
Course: International Payment (BAF307_201_5 L03_TA)
Class code: MAG310_201_5_L03