English for special purposes international business

Transfer of risk from the seller to the buyer Incoterm 2000: FAS A.. Transfer of risk from the seller to the buyer Incoterm 2000: FOB A.. Transfer of risk from the seller to the buyer

2 Clients look for ………… from an arbitration service

A speed and cost effectiveness

B reliability of the arbitrators and their decisions

C confidentiality

D all of the above (A, B and C)

3 The three main business areas which have traditionally been resolved by arbitration are …………

A shipping, commodity and construction

B shipping, commerce and wine

C commodity, construction and share

D construction, shipping and convenience

4 The term used to describe attempts to restrict imports into the country

D It depends on the agreement

7 The clause covers General Average

A A

B B

C A,B,C

8 A document that shows details of goods being transported; it entitles the receiver to collect the goods on arrival

C The forwarding agent

D The advising bank

13 Between which 2 parties is an insurance contract made?

A Between the insurer and the shipping company

B Between an insurance company and the shipping company

C Between the insurer and the party taking out insurance cover

D Between the assured party and the party taking out insurance cover

14 Transfer of risk from the seller to the buyer (Incoterm 2000): FAS

A When the goods are ex-quay

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

15 In joint venture, two or more companies ………… on specific projects

22 With this method of payment, banks play an active role Banks are responsible for paying for the exporter in case the importer fails to do so

D The confirming bank

25 Cultural differences are one of the potential ………… of international mergers

27 Transfer of risk from the seller to the buyer (Incoterm 2000): FOB

A When the goods are At the seller’s premises

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

28 A document used for transporting goods in containers by road, rail and ship without being open is a …………

29 The Mexican peso is trading for more than its usual value You can talk about

31 Transfer of risk from the seller to the buyer (Incoterm 2000): CFR

A When the goods are At the seller’s premises

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

32 ………… from a source country into a destination country for the purpose of exporting to a third country

C Combined transportation bill of lading

D Combined transport bill of lading

35 One problem in international mergers is the difference in ………… and benefits for managers with similar positions

A duties

B output

C activity

D compensation

36 A marine Bill of Lading becomes negotiable document and no restriction on ownership when it is …………

A to order, blank endorsed

B surrendered, blank endorsement

to satisfied their needs and wants

A Countries import the goods which they produce efficiently

B Countries probably export the goods which are not efficiently produced

C Countries probably exchange goods which they produce efficiently for goods which other countries produce efficiently

D Efficient exchange results from international trade

41 The exporter didn‟t receive payment for his goods because the buyer …………

43 Many countries, such as the United Kingdom and New Zealand, are ………… dependent on international trade

D Average clause general

45 Collecting, analyzing and reporting data relevant to a specific market situation (such as a proposed new product) is …………

A market analysis

B market segmentation

C marketing

D market research

46 A monetary system whereby the value of currencies could be converted into gold

at a country‟s central bank

D It depends on the agreement

48 War risk is not included in …………

50 A bankrupt person's ………… can be taken and used to repay his/her debts

A things

B items

C property

5 Why do sellers or buyers insure their cargoes?

A To protect themselves from loss or damage to their goods

B To protect themselves from loss only

C To protect themselves from damage only

D To protect the third party from loss or damage to their goods

6 Anything that acts as a security or guarantee for a loan

8 Earthquake, volcanic eruption and lighting are not covered under the cargo clause …………

12 With the open account method of payment, payment is made

A before the goods are shipped

B when there is no contract involved

C after the goods have arrived

D when the exporter doesn’t trust the buyer

13 Undertaking to indemnify means …………

A Disagree to pay compensation for loss or damage

B Agree to pay compensation for loss or damage

C Agree to pay for loss or damage without compensation

D Agree to pay compensation for the broker

14 Buying another company‟s shares on the stock exchange, hoping to persuade enough other shareholders to sell to take control of the company

A A merger

B An acquisition

C An integration

D A raid

15 Joining with firms in other stages of the production or sale of a product

A horizontal integration

B vertical integration

C backward integration

D forward integration

16 Two parties sign a contract

A The contract is binding

B The contract is effective

C The contract is binding and effective

17 Employing more staff has reduced our ………… time in the port

C The forwarding agent

D The confirming bank

22 Multinational companies usually have ………… in different countries

A daughter companies

B subsidiaries

C factories

D colleagues

23 The government has imposed protective tariffs to stop the ………… of cheap imports which threatened to destroy domestic industries

A rain

B famine

C flood

D storm

24 What do we call the difference between a country‟s imports and exports?

A the balance of trade

B the balance of payments

C the surplus

D the deficit

25 Multinational companies can adapt their management method to the …………

in each country or continent

30 A merger with or the acquisition of one‟s marketing outlets

37 Currency bought or sold today with delivery two business days later

40 Transfer of risk from the seller to the buyer (Incoterm 2000): DES

A When the goods are ex-ship

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

41 My endowment policy will ………… when I‟m sixty-five

C Railway consignment note

D Railway bill of lading

43 Merging with or taking over other firms producing the same type of goods or services is known as …………

A horizontal merger

B diversification

C vertical merger

D backward merger

44 Make sure all this equipment is insured ………… accidental damage

A over

B against

C with

D from

45 Transfer of risk from the seller to the buyer (Incoterm 2000): DAF

A When the goods are at frontier

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

46 All risks covered is under ………… clause

A factors of production, most importantly raw materials, but also labor pool

B climate, economies of scale

C natural resources and location

D All of these above

48 If the price is quoted CPT Vancouver, who pays for the freight?

A The exporter

B The forwarding agent

C The buyer

D The confirming bank

49 The person who goes between the person who wants the insurance and the person who underwrites it is …………

A factors of production, most importantly raw materials, but also labor pool

B climate, economies of scale

C natural resources and location

D All of these above

5 One problem in international mergers is the difference in ………… and benefits for managers with similar positions

7 Some of the language in insurance ………… is incomprehensible to most ordinary people

A The issuing bank

B The advising bank

C The confirming bank

D The opening bank

9 If the price is quoted FOB Singapore, who pays for the insurance and freight?

A The exporter

B The buyer

C The forwarding agent

D The confirming bank

10 In many cases, the insurance company doesn't take the financial …………

12 Undertaking to indemnify means …………

A Disagree to pay compensation for loss or damage

B Agree to pay compensation for loss or damage

C Agree to pay for loss or damage without compensation

D Agree to pay compensation for the broker

13 The document which shows details of goods being transported and which entitles the receiver to collect the goods is called a …………

A bill of exchange

B document of title

C bill of lading

D declaration

14 ………… takes place when a firm through FDI moves upstream or downstream

in different value chains i.e., when firms perform value-adding activities stage

by stage in a vertical fashion in a host country

17 Clients look for ………… from an arbitration service

A speed and cost effectiveness

B reliability of the arbitrators and their decisions

C confidentiality

D all of the above (A, B and C)

18 Which market is bigger?

A Super market is bigger than traditional market

B Street market is bigger than home market

C An open air market is bigger than a home market

D Product market is bigger than consumer market

19 A bill of exchange become payable upon …………

21 ………… are raw materials such as agricultural products and metals that are traded on special exchanges

D Average clause general

23 What is the most complete cover of insurance?

A No partial loss is payable

B Partial loss is payable

C It only covers total loss

D Against all risks

24 Insurance companies can be considered as professional ………… Takers

28 Transfer of risk from the seller to the buyer (Incoterm 2000): FAS

A When the goods are ex-quay

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

29 A life insurance policy pays out ………… your death or after a set period, whichever is first

31 Transfer of risk from the seller to the buyer (Incoterm 2000): DES

A When the goods are ex-ship

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

32 When a company‟s top executives buy the company they work for is known as

34 Two parties sign a contract

A The contract is binding

B The contract is effective

C The contract is binding and effective

35 A country with very low taxes is known as a …………

A tax heaven

B tax haven

C tax paradise

36 The process of making and defending a claim in court is …………

D The confirming bank

38 Joining with firms in other stages of the production or sale of a product is known as …………

43 Another term for "main business" is ………… business

D The forwarding agent

46 The risk of rough handling is not covered under the cargo clause …………

49 With the open account method of payment, payment is made

A before the goods are shipped

B when there is no contract involved

C after the goods have arrived

D when the exporter doesn’t trust the buyer

50 What do we call goods that go from one country to another?

A exports

B imports

C visible exports and imports

D invisible exports and imports

TEST 4

1 Among a number of international bodies offer arbitration services, the …………

in Paris is the most prestigious

3 What do we call the difference between a country‟s imports and exports?

A the balance of trade

B the balance of payments

C the surplus

D the deficit

4 General average has the conditions: …………

A The ship was in danger

B The captain decided to lighten the ship and the ship arrived the destination safely

C The captain decided to lighten the ship and the ship arrived the destination safely with the remaining cargo

D A and C

5 Multinational companies set up production facilities in countries where production is most efficient

A All countries allow foreign ownership of production facilities

B The larger company is called the parent company; the production facilities are referred

to as a subsidiary

C Subsidiary companies eliminate the problem of worldwide competition

D Each subsidiary needs to consider only local market condition

6 Buying a company for less than the value of its assets, the selling these assets to make a profit is called …………

A asset stripping

B An acquisition

C A takeover bid

D A raid

7 Undertaking to indemnify means …………

A Disagree to pay compensation for loss or damage

B Agree to pay compensation for loss or damage

C Agree to pay for loss or damage without compensation

D Agree to pay compensation for the broker

8 Steve works for BurgerPlanet He only earns about £6 …………

11 A country can accrue wealth if it exports more than it imports

A This country has a balance of trade deficit

B Demand for this country’s currency will fall

C This country receives money from countries which import its products

D All of these above

12 You can ………… a house and ………… a car

A hire/rent

B hire/hire

C rent/rent or hire

13 What is the most complete cover of insurance?

A No partial loss is payable

B Partial loss is payable

C It only covers total loss

D Against all risks

14 "Profit before tax" can also be called …………

A pre-tax profit

B without-tax profit

C non-tax profit

15 Some countries try to be ………… in certain commodities so that they are not dependent on imports

D container bill of lading

18 The fact that labour cots are lower in other countries ………… us at a tremendous disadvantage

A This country probably has a comparative advantage in agriculture

B This country most likely exports farm products

C This country can grow food efficiently

D All of the above

21 The exporter didn‟t receive payment for his goods because the buyer …………

23 Aims of a strategic approach made by multinational companies are …………

A to access raw materials and markets

B to get product efficiency and knowhow

C to access premises and natural resources

D A & B

24 If the price is quoted CIP Marseille, who pays for the insurance and freight?

A The buyer

B The exporter

C The issuing bank

D The forwarding agent

25 Transfer of risk from the seller to the buyer (Incoterm 2000): DAF

A When the goods are at frontier

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

26 A basis for mutually beneficial trade is the fact that one country has a comparative advantage

A Both the importing country and the exporting country benefit from trade

B One’s country comparative advantage can benefit another country

C The comparative advantage of one country can result in trade between countries

D All of these above

27 Among other things, a ………… contains details of the goods, their destination and the name of the ship carrying them

A bill of lading

B way-bill

C bill of exchange

D receipt

28 The Japanese yen is trading for less than its usual value You can talk about

…………

A a small yen

B a bad yen

C a weak yen

29 The main difference between arbitration and litigation is that …………

A Arbitration takes place in private

B Litigation takes place in court

C Arbitration takes place abroad

C visible exports and imports

D invisible exports and imports

33 In CIF and CIP contracts, ………… must pay for insurance from the point of delivery to the named point of arrival

A The exporter

B The importer

C The carrier

34 In these inflationary times it is important to keep the value of your policy closely

………… to the value of your property

A adapted

B linked

C indicated

D dependent

35 An insurance broker usually ………… several different insurance companies

40 Transfer of risk from the seller to the buyer (Incoterm 2000): EXW

A When the goods are At the seller’s premises

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

41 The risk of rough handling is covered under the cargo clause …………

A A

B B

C C

D A and B

42 Two forms of protectionism are …………

A quotas and tariffs

B surplus and deficit

C duties and taxes

D barriers and non-barriers

43 Factors that can give a country an absolute or comparative advantage in goods and services over other countries are …………

A factors of production, most importantly raw materials, but also labor pool

B climate, economies of scale

C natural resources and location

D All of these above

44 A force majeure is an ………… event such as strike, riot or natural disaster which prevents a contract from being …………

D It depends on the agreement

46 Weight is important for air transport because if its …………

A size

B high freight rates

C measurement

D high quality

47 Transfer of risk from the seller to the buyer (Incoterm 2000): FAS

A When the goods are ex-quay

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

48 The term used to describe attempts to restrict imports into the country

50 A company which makes a profit can be described as profitable or …………

A profit-getting

B profit-making

C profit-having

TEST 5

1 Factors considered when choosing the modes of transportation are ………

A freight, size and premium

B time, length and weight

C nature of the goods, size and rates

D nature of the goods, time and freight rates

2 Simultaneous purchase and sale of the same foreign exchange in different markets to profit from rate differentials

A This country probably has a comparative advantage in agriculture

B This country most likely exports farm products

C This country can grow food efficiently

D All of the above

5 A merger with or the acquisition of one‟s marketing outlets is known as

7 Transfer of risk from the seller to the buyer (Incoterm 2000): EXW

A When the goods are At the seller’s premises

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

8 A merger with or the acquisition of one‟s suppliers

14 The advantages of arbitration are …………

A Private and foreseeable costs

B Lengthy and open

C Binding and rigid

A the balance of trade

B the balance of payments

C deficit

D surplus

22 What is a transferable credit?

A It is the kind of credit which allows the exporter to transfer his right as the credit’s beneficiary to any third party

B It is the kind of credit which allows the first beneficiary to request the confirming bank

to pay a third party

C It is the kind of negotiable document with which the exporter can endorse for any third party

D It is the kind of credit with which the buyer will not necessarily know who is the actual supplier of the goods

23 If the price is quoted FOB Singapore, who pays for the insurance and freight?

A The exporter

B The buyer

C The forwarding agent

D The confirming bank

24 The bill of lading issued by the carrier for sea transport is called …………

28 Is there any requirement that the air waybill shows the date of the flight?

A No, there isn’t

B Yes, there is

C Never is there such a requirement

D No, it is an incorrect requirement because a correctly completed waybill cannot show this information

29 A life insurance policy pays out ………… your death or after a set period, whichever is first

A Dumping is always against government policy

B Dumping is always beneficial to the importing country because buyers pay lower prices

C Exporters dump products on foreign markets to lower domestic employment

D Some reasons for dumping could be inventory reduction, maintenance of domestic employment, and continuation of high production levels

31 ………… is an approach to business that emphasizes persuading customers to buy products that you already have, rather than producing new ones that customers may want

C The issuing bank

D The forwarding agent

33 Among other things, a ………… contains details of the goods, their destination and the name of the ship carrying them

35 Currency bought or sold today with delivery two business days later

40 Transfer of risk from the seller to the buyer (Incoterm 2000): FOB

A When the goods are At the seller’s premises

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

41 An insolvent company often goes into liquidation A private individual who cannot pay his/her debts may be declared ………… by a court

A bankrupt

B indebted

C penniless

42 What do we call the difference between a country‟s imports and exports?

A the balance of trade

B the balance of payments

C the surplus

D the deficit

43 Transfer of risk from the seller to the buyer (Incoterm 2000): CPT

A When the goods are At the seller’s premises

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

44 If shipment is under Incoterms other than CIF or CIP, …………

A The buyer has to arrange the insurance cover by himself

B The buyer may still ask the exporter to arrange some aspects of the insurance for him

C The exporter has to arrange the insurance cover for the goods

D The exporter pays for insurance till the port of discharge

45 A bank that issues a letter of credit (i.e the importer‟s bank)

48 If a letter of credit is confirmed, ………… takes responsibility for payment

A the importer’s bank

B the importer

C the exporter

D the exporter’s bank

49 My endowment policy will ………… when I‟m sixty-five

A ripen

B mature

C flourish

D break

50 A public offer to buy a company‟s shareholders to buy their shares, at a particular price during a particular period, so as to acquire a company

A A merger

B An acquisition

C A takeover bid

D A raid

3 A bill of lading with the note is …………

A Clean bill of lading

B Claused bill of lading

C Clear bill of lading

4 A basis for mutually beneficial trade is the fact that one country has a comparative advantage

A Both the importing country and the exporting country benefit from trade

B One’s country comparative advantage can benefit another country

C The comparative advantage of one country can result in trade between countries

D All of these above

5 The term used to describe attempts to restrict imports into the country

A tax

B quota

C protectionism

D tariff

6 Transfer of risk from the seller to the buyer (Incoterm 2000): DEQ

A When the goods are ex-quay

B When the goods are handed to the first carrier

C When the goods across the ship’s rail

D When the goods are on board

7 My endowment policy will ………… when I‟m sixty-five

A ripen

B mature

C flourish

D break

8 Unless the letter of credit states otherwise, insurance coverage on a CIF or CIP shipment must be for ………… of the CIF (or CIP) value of the goods