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26 Cards in this Set

  • Front
  • Back
payments in advance
the safest method of payment from the exporters perspective
buy foreign accounts recievable at a discount from face value
documentary collection
whereby commercial banks serve as agents to facilitate the payment process
a document drafted be the exporter that demands payment from the buyer at a specific time.
bill of lading
serves as both th etransportation between the exporter and the carrier and as a title for the goods in question
sight draft
requires payment of tiytle to goods at the point of transfer.
time draft
extends credit to the importer by requiring payment at some time in the future.
trade acceptance
an accepted time draft, it is legally enforcable and negociable deft instrument
bankers acceptance
a fee the importers bank also may accept a time draft, thereby adding its own obligation to pay the draft to the importers obligation
without recourse
when the buyer of the acceptance is stuck with the loss if the importer does not pay
with recourse
meaning the exporter will have to reimburse the buyer of the acceptance in the case of non payment by the importer
letter of credit
a document that is issued bY A bank and contain its promise to pay the exporter on recieving proof that the exporter has fulfilled all requirement specified in the documents
advised letter of credit
letter of credit in which the sellers bank advises the seller about the credit worthiness
confirmed letter of credit
the exporter can also request its bank to add its own guarantee of payment to the letter of credit
irrevocable letter of credit
a leeter of credit that cannot be altered without and the exporter
revocable letter of credit
a letter of credit than can be changed by the bank without th econsent of the buyer or the seller
counter trade
when a firm accepts something other than money as payment for its goods and services
counter purchase
when one firms sells its products to another firm at one point for compensation in th eothers firms product at another time.
buy back
when one firm sells capital to another firm and is compensated in the form of the output
offset purchase
form of countertrade in which a portion of the exported good is produced in th eimporting country
clearinghouse accounts
when the exporting firm incurs a counterpurchase obligation of an equivalent value
switching arrangements
whereby countertrade obligation are transfered from one firm to another
transaction exposure
when the excahnge rate chamges in the middle of a purchase
translation exposure
th eimpact on th efirms consolidated financil statement s of fluctuations in exchange rates that change the value of foriegn subsidiaries as measures in the parent company
economic exposure
the impact on the value of a firms operstions of unanticipated exchange rate changes
centralized cash management
system controlled by a parent corporation that cordinates worldwide cash flows of its subsudiaries and pools thier cash reserves