EXIM Finance MCQ Questions and Answers Part – 1
1. Incoterms cover
A. trade in intangibles
B. ownership and transfer rights
C. contracts of carriage.
D. rights and obligations of parties to contract of sales
2. Which of the following term cannot be used for transportation of goods by sea?
3. The incoterm providing least responsibility to seller is
4. The group of incoterms under which the seller’s responsibility is to obtain freight paid transport document for the main carriage is
A. E terms
B. C terms.
C. D terms
D. F terms.
5. The incoterm should indicate the place of shipment in case of
A. F terms
B. E terms.
C. C terms.
D. D terms.
6. Incoterm is specific about the responsibility for marine insurance in case of
A. FOB and EXW
B. FOB and CIF.
C. CIF and CIP.
D. CPT and DDP.
7. The group of terms arranged in order of increasing responsibility of exporter is.
A. C,D,E and F terms.
B. D,E,F and C terms.
C. E,F,C and D terms.
D. F,C,E and D terms.
8. The price quoted by the seller for the product
A. will vary depending upon the incoterm chosen.
B. irrespective of the incoterm.
C. will be the base price; the effect of incoterm to be added later.
D. will include only cost.
9. Adoption of incoterm is
A. compulsory for all international contracts
B. compulsory for all letter of credit transactions.
C. optional for the parties to the contract.
D. mandatory for transactions with Europe.
10. Which of the following term cannot be used for transportation of goods by Road or Air?
11. Packing credit is
A. an advance made for packing goods for export.
B. pre-shipment finance for export.
C. a priority sector advance.
D. advance for importer.
12. The amount of packing credit should not normally exceed
A. the local cost of manufacture for the exporter.
B. FOB value of the export contract.
C. CIF value of the export contract.
D. the cost of manufacture or FOB value of the export contract whichever is less.
13. Which of the following person is not eligible for packing credit?
A. a .merchant exporter.
B. a person making deemed exports.
C. sub-suppliers to manufacture exporter.
D. supplier to sub-supplier to manufacture exporter.
14. The running account facility for packing credit is available for
A. status holders only.
B. export for specified goods.
C. exporters with good track record
D. exporters with orders above Rs. 100 crores.
15. The advantage to the exporter of running account facility of packing credit is
A. production of letter of credit or firm order is completely waive
B. the period of facility need not be adhered to.
C. production of letter credit on firm order is waived immediately they must be produced within a reasonable time.
D. the rate of interest is low.
16. The exemption from the condition credit should not exceed the domestic cost of production is not waived for
A. commodity eligible for duty drawback.
B. commodity imported under advance licence
C. HPS groundnuts.
D. agro-based productions like tobacco.
17. The substitution of commodity/fresh export of adjustment of packing credit is not available for
A. advance against sensitive commodities.
B. transactions of sister/associate/group concerns.
C. exports availing running account facility.
D. exports with imports.
18. Normally the maximum period for which packing credit advances are made is
A. 90 days.
B. 135 days.
C. 180 days.
D. 360 days.
19. A pre-shipment advance is not expected to be adjusted by
A. proceeds of export bill
B. export incentives.
C. post-shipment finance.
D. local funds.
20. A packing credit was granted against an export order but the export could not take place
A. It should be reported to the RBI
B. The exporter should be blacklist
C. Claim should be preferred with ECG
D. Interest at domestic rate should be charged on the advance from the date of advance
21. For direct export the packing credit should normally be granted only against
A. a letter of credit.
B. firm order.
C. export licence.
D. a letter of credit or firm order.
22. For packing credit in rupees the interest of period up to 180 days is chargeable at
A. BPLR minus 2.5%.
B. BPLR minus 3%.
C. not exceeding BPLR minus 2.5%.
D. not less than BPLR minus 2.5%.
23. Pre-shipment credit in foreign currency is available for a period of
A. maximum 180 days.
B. minimum 180 days.
C. maximum 270 days.
D. maximum 360 days.
24. Pre-shipment credit in foreign currency can be availed in
A. US Dolor only.
B. the currency of export only.
C. the currency of import only.
D. any permitted currency.
25. Advising of letter of credit will be done by the bank
A. only to its customers
B. to any person provided the letter of the credit is issued by its correspondent bank.
C. free of charge to its customers and for a cost to others.
D. to any beneficiary and from any issuing bank.
26. The following is not a post-shipment advance
A. negotiation of bill under letter of credit
B. purchase of foreign bill.
C. advance against foreign bill for collection
D. packing credit.
27. A bill drawn under a letter of credit contains discrepancies
A. the bank should refuse to negotiate documents
B. take the bill on a collection basis only.
C. must negotiate irrespective of discrepancies
D. may purchase it or take it for collection, but should not refuse to handle the bill.
28. If an export bill which was purchased /negotiated is not realized within reasonable time from the due date the bank should
A. reserve the bill from the export bill purchase portfolio.
B. make a claim with ECGC
C. report to RBI.
D. take further bills from the exporter only on collection basis.
29. The following is a must for an exporter
A. GR form.
B. EP form.
C. PP form.
D. GRX form.
30. Duty drawback is the refund of duty chargeable on
A. Imported material
B. Exported material
C. Damaged material.
D. Mortgaged material
31. Availing post-shipment credit in foreign currency is compulsory for
A. exporters who have not availed packing credit.
B. all exporters who have availed packing credit.
C. exporters who have availed pre-shipment credit in foreign currency.
D. exporters who have availed credit from banks.
32. Post-shipment credit in foreign currency can be availed by
A. use of on-shore foreign currency funds
B. banks raising foreign currency funds abroad
C. exporters arranging funds abroad
D. any of the above methods.
33. Advance remittance from importer can be accepted by an exporter in India provided
A. the advance does not carry interest payment.
B. shipment will be made only after one year from the date of receipt of advance.
C. advance does not exceed 25% of export value.
D. rate of interest,if payable, does not exceed Libor plus 1%.
34. A bank may refuse to accept an export bill for collection
A. when the customer has sufficient limits under bill discounting facility.
B. when the documents have discrepancies when compared to letter of credit requirements.
C. when the documents are received from a non-customer
D. when the documents are received from a customer.
35. . If the importer refuses to accept the bill drawn on him the exporter
A. should reimport the goods.
B. must find an alternate buyer.
C. may reimport or sell to an alternate buyer depending upon commercial expediency
D. sue the importer.
36. If export cargo is lost in transit, the exporter should
A. claim under marine insurance.
B. claim with ECGC
C. seek write off of post-shipment credit.
D. seek refund of customs duty.
37. Pre-shipment rupee credit from Exim bank is available for
A. period up to 180 days.
B. period beyond 180 days.
C. turnkey projects only.
D. foreign currency components only.
38. For export-oriented units, Exim bank finances
A. term loans only.
B. both working capital and term loans.
C. term loans, working capital and long term working capital.
D. for investment from overseas.
39. Which of the following is not a common feature of direct lending by Exim bank?
A. They are for medium or long term.
B. The size of the loan is high.
C. Security is not insisted upon.
D. Interest rates are relatively low.
40. Bid Bond issued as part of
A. supply bidding process
B. Turnkey project
C. Post-award clearance
D. Deferred payment
41. Exim bank lending to foreign governments take the form of
A. soft loans.
B. commercial loans.
C. lines of credit.
D. relending facility.
42. The facility that is available to commercial banks in India from Exim bank is
A. refinancing of export credit.
B. export bill re-discounting.
C. syndication of export credit risks.
D. all the above.
43. Exim bank issues guarantees on behalf of
A. all exporters from India.
B. exporters of construction and turnkey projects
C. banks in India.
D. Govt. of India.
44. Exim bank issues guarantees to commercial for
A. all export advances
B. all export advances repayable beyond one year.
C. post-shipment suppliers credit from one year to three years.
D. loans with refinance from Exim bank.
45. Export factoring is available for
A. short term exports.
B. medium-term exports.
C. all exports.
D. export under consignment basis.
46. Which of the following service is not provided by an export factor?
A. invoice discounting.
B. providing credit information.
C. maintenance of debtors account.
D. none of the above.
47. Export factoring encourages the following method of payment
A. open account system.
B. letter of credit method
C. documentary bill.
D. advance payment.
48. Factoring refers to.
A. discounting of any export bill.
B. discounting of medium-term export bill.
C. writing off unrealized export bill.
D. waiver of charges on export bills.
49. Under supplier’s credit for deferred payment exports scheme of Exim bank
A. pre-shipment finance is available for periods beyond 180 days
B. post-shipment finance is available in Indian rupees for deferred payment exports.
C. post-shipment finance is available in foreign currency for deferred payment exports.
D. post-shipment finance is available in Indian rupees or foreign currency for deferred payment exports.
50. Which of the following statements relating to consultancy and technology services finance programme of Exim bank is wrong?
A. The exporter is expected to get an advance payment of 25%
B. The export should be covered byECGC policy.
C. Minimum period of the loan is seven years.
D. They should be secured by a government guarantee or letter of credit.