MBA 3rd Sem International Trade Finance

Q1. What are the implications of Trade Theories on the present day economic scenario in the international trade?
Q2. “It is unfortunate that MNCs have not been able to take full advantage of international trade of theories.” Comment.
Q3. “International Financial Corporation is a redundant Corporation.” Comment
Q4. Anlayse the importance of International Purchasing with respect to India’s Purchase Policy.
Q5. What role does the WTO play with respect to the Indian Economy.?
Q6. How can you start your own export business? Explain in detail
Q7. The responsibilities of the foreign banks in the Export Finance Area have today increased tremendously, as compared to earlier years of 20th century” Comment.
Q8. When are the goods/merchandise sent directly to the importer and when are they sent to the importer’s banks? Explain with examples.

Case Study
International trade is shrinking fast amid the global credit crunch and economic recession, that was triggered by the US sub-prime loan problem. The economic downturn is so significant and extensive that countries across the world now see their trade figures contracting. The effects of these negative developments are now impacting global trade.
The total value of a country’s imports is determined by its economic size. Thus economic contraction results in a decrease in international trade. Meanwhile, a reduction in exports leads to a decrease in domestic demand, hence contributing to an economic downturn.
The vicious cycle of contracting trade leading to further deterioration of the world economy must be stopped. To find a way out, in the short turn we have no choice but to count on the monetary and fiscal policies of the countries involved. Following moves made by the US at the epicenter of the economic turmoil, where the government and monetary authorities had taken steps to facilitate the disposal of bad asserts, ease credit and roll out significant fiscal stimulus programs, the Japanese authorities implemented their own fiscal stimulus and monetary easing measures. These measures, which were implemented in rapid succession at the end of 2008, were justifiable and necessary short-term responses to the crisis.
In addition to issues that require macroeconomic policy measures, additional issues must be addressed through trade policy in order to break the vicious cycle of economic recession and trade contraction.
In the midst of the present economic downturn, calls for the protection of domestic industries and workers have been mounting since 2008 in countries across the world.
Q1. What are the reasons for Economic Downturn of the US and the EU?
Q2. How is export and import related to downturn of the western world?
Q3. a) “Japan is one of the strongest Economy of the world but it still suffered due to Economic Downturn of the US.” Why? Give Reasons. b) Will the Japanese economy recover by its own efforts?

1. _____________in international trade is a costly process, hence the exporter must take prudent decisions in choosing the method of receiving payments from the foreign buyers
2. As per ______ rules, the exporter has to bring the export proceeds in free foreign exchange only
3. The period of ________cycle in international trade is longer and the degree of risk in financial matters is also higher.
4. In case of economic turbulence or crisis, there may be ____________ restrictions that may prevent the outflow of funds from the importer’s country
5. In a bad phase, a country may impose foreign outflow restrictions in order to _________ its financial and economic system
6. The ___________of the importer is major issue to be checked by the exporters
7. To cover the payments risk due to importer default or insolvency, it is advisable that the exporter gets his transactions covered by the ______.
8. The _____________system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international
9. The ________sometimes known as the “Big Board”
10. Japan Exchange Group is an Asian financial services corporation that operates multiple securities exchanges including _______ Exchange and Osaka Securities Exchange
11. _______________is Asia’s second largest stock exchange in terms of market capitalization
12. _____________are the most active players in the foreign exchange market
13. The purpose of a _________ is to permit the trading banks to maintain desired foreign exchange balances.
14. The primary function of a foreign exchange market is the transfer of __________ power from one country to another
15. __________ refers to covering of foreign trade risks, and it provides a mechanism to cover foreign trade risks
16. When a company sells goods or services to a foreign customer and receives foreign currency, it needs to convert the foreign currency into the _________ currency
17. ___________ energy exchange develops, operates and connects secure, liquid and transparent markets for energy and related products.
18. Which famous bank is known as the International Bank for Reconstruction and Development (IBRD)?
19. The ______came into official existence on December 27, 1945; when 29 countries signed its Articles of Agreement (its Charter)
20. What does IDA stand for?
21. __________ encourages private enterprises in developing countries through its affiliate, the International Finance Corporation
22. 1986 was a significant year for the UNECAFE because ________ joined the Bank and India received her first loan of $100 million
23. What does DMC stand for
24. The _______ bank typically funds up to 35 per cent of the total project cost for a greenfield project.
25. ______Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other entities overseas
26. Exim Bank is wholly owned by government of ______
27. To promote hi-tech exports from India, the Exim Bank has a ________ programme to finance research and development (R&D) activities of export-oriented companies
28. The Bank became the first Indian entity to tap the _________ Dollar market and Singapore Dollar market
29. The World Bank has two affiliates which are legally and financially distinct entities, the IDA and the ______.
30. ______lends money to members having trouble meeting financial obligations to other members, but only on the condition that they undertake economic reforms.
31. The ____________ Bank was founded to promote social and economic progress of Asian and the Pacific region
32. International trade is more difficult and risky, however, than domestic trade because of __________
33. _________ notes issued by the importer evidence the credit
34. _________ratings are intended to provide a long-term view of creditworthiness based on fundamental analysis
35. Ratings allow borrowers to access global and domestic markets and attract investment funds, thereby adding ____________ to markets
36. The Government of India established _______ for the purpose of strengthening and boosting export promotion efforts by covering the risk of exporting on credit
37. ECGC offers various policies based on ________perception
38. ECGC helps exporters in financing their trade transactions by offering _________ to commercial banks
39. The very purpose of export credit insurance is to _________exporters from payment risks arising due to both political and commercial uncertainties in various countries.
40. The ______ bank provides competitive finance at various stages of the export cycle
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