Foreign Trade @iq_1

1. Documents are in order in LC if documents are in accordance with

a). LC terms
b). UCP 600
c). ISBP 745
d). All of the above
2. In UCP 600, Importer or Buyer is called as
a). Beneficiary
b). Applicant
c). Opening party
d). All of the above
3. Which one is the most preferable to an importer?
a). Cash in advance
b). Documentary Collection
c). Open Account/consignment sale
d). Documentary Credit
4. Which one of the following is a financing technique?
a). Irrevocable LC
b). Back to Back LC
c). Revocable
d). None of the above
5. Of the following which one is the most popular type of LC in Bangladesh?
a). Revocable LC
b). Standby LC
c). Transferable LC
d). Red clause LC
6. Which one of the following is true
a). Confirmed LC contains two undertaking
b). Advance payment is the most preferable method of payment to the importer
c). Documentary collection is guided by URC 522
d). Proforma invoice is same as commercial invoice
7. Which of the following banks purchases/ discounts export bill under LC?
a). Issuing Bank
b). Nominated Bank
c). Advising Bank
d). Reimbursing Bank
8. Which of the following is an ICC GUIDELINE?
a). FERA 1947
b). Import Policy
c). Export Policy
d). Incoterms 2010
9. Which of the following is the major foreign currency earner in the country?
a). Leather
b). Handicraft
c). RMG
d). Agricultural Commodities
10. Which one of the following is most preferable to the Exporter?
a). Cash in Advance
b). Documentary Collection
c). Open Account
d). Documentary Credit
11. LTR is an example of
a). Pre Shipment credit
b). Pre import credit
c). Post shipment credit
d). None of the above
 Foreign Trade @iq_2

12. In the context of foreign exchange transactions, minimization of risk means

a). Hedging
b). Arbitrage
c). Speculation
d). None of the above
13. Which of the following is an export financing technique?
a). LC
b). PAD
c). LTR
d). Packing credit
14. Most commonly used transport document in the country is
a). Airway bill
b). Courier receipt
c). Bill of lading
d). Railway receipt
15. The main service of the offshore banking units in the country is
a). Financing A type industry in EPZs
b). UPAS LC services
c). Supporting B and c type industries in EPZs
d). Financing C type industry in EPZs
16. LCAF means
a). Letter of credit application form
b). Letter of credit authorization form
c). Letter of credit application forum
d). Letter of credit authorization forum
17. According to EXP proceed needs to be realized with in
a). 8 months
b). 5 months
c). 4 months
d). 3 months
18. Import policy order and export policy are published by
a). Ministry of Finance
b). Central bank
c). Ministry of Commerce
d). None of the above
19. In Bangladesh LC can be issued by
a). IDLC
b). Grameen Bank
c). Authorized Dealer
d). Bangladesh Bank
20. Which of the following is true in regard to documentary credit?
a). Issuing bank can also be an advising bank
b). Issuing bank may negotiate
c). Nominated bank may honour
d). Presenter is responsible to negotiate documents
21. International banking includes-
a). Trade payment
b). Trade finance
c). Foreign Exchange
d). All of these
22. In documentary collection, exporters present documents to the counter of-
a). Issuing bank
b). Nominated bank
c). Negotiating bank
 Foreign Trade @iq_3
d). Remitting bank

23. LIM is a-
a). Post import financing technique
b). Pre import financing technique
c). Pre shipment financing, d). Post shipment financing to the exporter
24. Which one of the following is most preferable to the exporter?
a). Open Account
b). Documentary collection
c) Cash in advance
d). Documentary credit
25. Documentary collection is relatively risky for-
a). Exporter
b). Importer
c). Buyer
d). Beneficiary
26. Commercial Invoice is issued by-
a). Applicant
b). Beneficiary
c). Importer
d). Exporter
27. In LC process the nominated bank is-
a). Advising bank choice
b). Importer’s choice
c). Reimbursing bank choice
d). Exporter’s choice
28. URR 725 is the regulatory framework for-
a). Reimbursement
b). Documentary collection
c). Reimbursement in LC operation
d). Cash in advance
29. Charges of the advising bank is commonly beard by
a). Issuing bank
b). Exporter
c). Importer
d). Nominated bank
30. Who are the main parties of a confirmed credit-?
a). Issuing bank
b). Confirming bank
c). Beneficiary
d). All of above
31. Which one of the following is not party of documentary credit?
a). Issuing bank
b). Confirming bank
c). Beneficiary
d). The applicant
32. What triggers settlement order documentary credit?
a). Evidence of shipment of goods
b). Letter of introduction
c). Handing over the documents to an applicant
d). Presentation of complying documents by the beneficiary
33. An exchange rate is the price of-
a). Local currency in terms of foreign currency
b). Foreign currency in terms of Local currency
c). Other currency expressed in terms of another currency
 Foreign Trade @iq_4
d). All of these

34. Which of the following exchange rate is applicable for LC-

a). OD sight/BC selling rate c). TT doc
b). TT clean d). TT doc selling
35. A credit opened on the basis of an original credit in favour of another beneficiary
is called-
a). Revolving credit
b). Security credit
c) Back to back credit
d). Transferrable credit.
36. An exporter sells goods overseas on FOB and CIF Inco terms respectively. Who
is responsible for the freight and other charges in each?
a). Importer (FOB)/Exporter (CIF)
b). Importer (FOB)/Importer (CIF)
c). Exporter (FOB)/ Importer (CIF)
d). Exporter (FOB)/ Exporter (CIF)
37. Nominated bank is legally the agent of
a). Issuing bank
b). Exporter
c). Importer
d). Advising bank
38. Back to Back LC should be-
a). Sight LC
b). Usance LC
c). Stand by LC
d). All of the above
39. Packing credit is-
a). Advance for packing goods for export
b). Pre- shipment finance for export
c). A priority sector advance
d). Advance for import
40. Who is responsible for issuing Bill of lading?
a). Shipping company
b). Shipping company agent
c). a & b
d) None of these

ADDITIONAL QUESTIONS:

1. Latest version of UCPDC: UCPDC 600

2. UCPDC 600 effect on: 1st July 2007

3. Maximum tenor of a ULCBB or Validity of LC: 180 days

4. Validity of Usance LC: 30, 60, 90, 120, 180

5. How many articles are in UCP-600? 39

6. How many sections are there in the Foreign Exchange Regulation Act 1947: 27

7. How many types of Incoterms: 11

 Foreign Trade @iq_5
8. What is the name of the latest revision of incoterms: Incoterms 2010

9. Bond License issued by: Customs

10. IRC & ERC issued by: CCI & E

11. Validity of IRC/ERC is: 1 year

12. Import & Export policy is issued by: Ministry of Commerce

13. Monetary policy issued for: 6 months

14. Monetary policy issued by- BANGLADESH BANK

15. Export policy & Import policy are issued for: 3 years

16. Validity of LTR & LIM: 90 days

17. Maximum tenure of PAD: 21 days

18. Bill of entry will be overdue after: 120 days
19. For examining documents concerned bank has maximum: 5 banking days
20. Shipment has to be made within the 17 months in terms of machinery and 09 months
for the other products from the issuance of LCAF.
21. The shipping documents are presented within the 21 days from the shipment as per
UCPDC. It is called presentation of documents
22. Export proceeds must be repatriated within 4 Months from date of Shipment.
23. In case of industrial LCA shipment validity is 17 months.
24. Insurance policy must be taken with coverage of 110% of the underlying goods value
at minimum
25. The payment of LC within
18 months in Capital Machinery and 12 months in other item
26. Bill of entry is the proof of
Payment complied with value of goods.
27. Maximum permissible PC is
15% of FOB value
28. What is the responsibility of an advising Bank?
To confirm the authenticity of a LC
29. Minimum parties of LC: 4
30. The AD will issue LCAFs in sets of 5 copies each.

31. How many methods are using in import trade? Four (04)
32. Packing Credit is a popular means of

Pre shipment export financing

33. What is the elaboration of URR

Uniform Rules for Reimbursement under documentary credit

 Foreign Trade @iq_6
34. Commercial invoices must appear to be issued by the Beneficiary

35. Issuing Bank’s liability is Primary

36. For purchase of foreign currency for import payment, application must be made to AD
in which of the following for? IMP
37. Major RMG export from Bangladesh to Europe
38. Which one is not included in funded credit? LC
39. Which of the following belongs to pre-shipment credit?
Back to Back LC
40. Generally, which bank makes initial payment to the exporter after receiving the
documents? The Negotiating Bank
41. L/C is an undertaking of making payment given by
Opening Bank to Consignor
42. What does ‘UPAS’ stand for
Usance Payment At Sight
43. Exp Form 02 Set
44. Annual travel quota for release of foreign currency in a calendar year is?
USD 12000
45. An incoming passenger can bring
Up to US$. 5,000.00 Without declaration
46. Travelling Quota for SAARC USD5000/- outside SAARC USD7000/-

47. What is the initial amount for the persons other than non-resident Bangladeshis to
open a NFCD A/c?
USD25000
48. FMJ Reporting: For
USD more 5000 (Cash Carrying) (FOREX Related)
49. ERQ stands For
Exporters’ Retention Quota
50. Shipping Documents means?
All documents except DRAFT
51. In case of export, single customer exposure may be 50% of banks total capital.
52. Up-to what percentage an exporter can retain Foreign Currency in ERQ Account?
10%
53. Limit of EDF-20 million for single borrower
54. Inco Terms published by –ICC (International Chamber of Commerce)

55. Post Import Finance= LBPD

56. BB L/C allowed up to 80% of Net FOB value (including PC)

57. Retention Quata is 10% of Net FOB Value.
58. The Opposite of Hedging is Speculation.

59. Forex Risk can avoid by- Hedging

 Foreign Trade @iq_7
60. Bill of Lading is-a Transport Documents/Title to the Goods/Quasi Negotiable
Instruments
61. Who are the main parties of a confirmed credit-?
Issuing Bank, Confirming bank, Beneficiary
62. PC (Packing credit) facility is allowed to a customer, interest@ 7%
63. In case of foreign trade in Bangladesh which payment method is widely used:
Documentary Credit
64. Foreign Exchange Regulation Act-1947
65. Which is not a currency as per FERA 1947?
Bill of Lading
66. Which kind of LC is generally opened under Export LC?
BBLC
67. What is the LC value for which credit report is mandatory for opening of LC against
indent?
10 Lac and above

68. Which of the following is not among the main/core parties of LC-
Advising Bank
69. As per CFR term, who covers the cost of main carriage-
Exporter
70. Forex return statement represents
Total foreign Exchange transaction

71. Export business should be routed through-

AD
72. Back to back LC has Three (03) parties

73. Who are the parties involved in performing custom formalities?

C & F Agent
74. FERA-1947 is applicable for
Bangladesh Citizens
75. What is the second highest export earning product of Bangladesh?
Shrimp and Frozen food
76. Which is the example of Demand loan.
PAD
77. Regulatory Frame work of International Trade-
UCPDC-600, URC-522, URR-725, INCOTERMS-2010

78. Which risk is mainly managed by Treasury Division-

Liquidity, Exchange Rate, Interest Rate Risk
79. Which one is specifically used for RMG financing?
PC
80. NOSTRO A/c. Our Account with you
81. Vostro A/c. Your Account with us
82. OAP is a forced loan and allowed for maximum
Maximum 90 days
 Foreign Trade @iq_8
83. Possession of goods under LIM
Bank
84. Which is the Primary Security for LC?
Shipping Documents
85. ETP stands for
Effluent Treatment Plant

86. The Primary Security of Usance Letter of Credit (ULC) is

Mortgage of Land & Building

Acceptance of the customer/shipping documents
Personal Guarantee of the Proprietor/Directors
Post Dated Cheque
87. Bill of lading 3 copy original

88. Treasury Bills are sold/issued by

a. Bangladesh Bank b. Security Exchange Commission
c. Dhaka Stock Exchange d. National Saving Bureau
89. ACU Dollar is equal to
a. USD b. EURO
c. GBP d. Yen
90. An issuing Bank is –
a. Bank of exporter b. Bank of importer
c. Both a and b d. None
91. An advising Bank is-
a. Bank of exporter b. Bank of importer
c. Both a and b d. None
92. Certificate of Origin refers to
a. Exporter country b. Importer Country
c. Manufacturer Country d. None
93. Bill of Entry is-
a. Complete List of imported goods b. Complete statement of price
c. Complete statement of invoice d. Complete statement of Lading
94. GSP implies to
a. Generalized System of preference b. General System of Preference
c. Generalized Statutory Platform d. None
95. UCPDC, URR, URC are some publications of
a. IMF b. WTO
c. ICC d. OECD
96. An L/C is a-
a. Documentary Credit b. Guarantee of Credit
c. Guarantee of payment d. Documentary Exchange
97. The Headquarters of ICC is at-
a. Paris b. London
c. Beijing d. Tehran
98. What is invoice?
a. Import document b. Export document
c. Remittance document d. List of goods, quality and price
99. FOB means-
a. Free on Board b. Free on Boat
c. Free on Busket d. Free on Bangladesh
100. Letter of Credit is a definite undertaking by –
a. Importer b. Exporter
c. Issuing Bank d. Advising Bank
 Foreign Trade @iq_9
101. Inco-Terms means –
a. Trade terms b. Sale terms
c. Purchase terms d. All of above
102. “Proforma invoice” in International Trade is issued by-
a. Seller b. Local agent of the seller
c. Issuing bank d. Advising Bank

103. Bill of Lading is a document issued by the-

a. Exporter b. Custom Authority
c. Transport Authority d. Exporter’s Bank
104. SDR means-
a. Security Deposit Receipt b. Special Drawing Right
c. Standard Drawing Regulation d. Standard Development Rule
105. CFR means –
a. Custom & Freight Receipt b. Cost & Freight
c. Cost, Fright & Insurance d. None
106. Bank rate is the instrument of –
a. Fiscal Policy b. Micro Economics
c. Monetary Policy d. All the above
107. LCAF stands for-
a. Letter of Credit Application Form
b. Letter of Credit Authorization From
c. Letter of Credit Appraisal Form
d. Letter of Credit Adjustment
108. Bill of Exchange is Prepared by the –
a. Importer b. Exporter
c. Customs authority d. shipping authority
109. Bill of Entry is required –
a. For release of imported goods b. To export good
c. For import business d. None of the above
110. What happens when export exceeds import-?
a. Trade deficit b. Trade surplus
c. Balance of Payment Surplus d. Tariff Surplus
111. In case of international trade, CIF means
a. Cost including Freight
b. Carrying with International Flag Vessel
c. Cost, Insurance & Freight
d. None of the above
112. Letter of Credit is opened in favour of-
a. Importer b. Exporter
c. Remitter d. None
113. Income earned from buying & selling of foreign currency is called-
a. Profit b. Commission
c. Exchange gain d. Service Charge
114. Bill of lading is issued by-
a. Custom Authority b. Exporter’s Bank
c. Exporters d. Shipping Authority
115. In Import Business, Bill of Entry is the evidence of-
a. Shipment of goods b. Arrival of the goods
c. Inspection of goods d. Delivery of foods
116. Which rate is applicable for private remittance?
a. TT and OD selling Rate b. B.C Selling Rate
 Foreign Trade @iq_10
c. TT Documentary Rate d. OD Transfer Rate
117. When IRC Expired?
a. 30th June, each year
b. 31st December, each year
c. After one year from the last renewal
d. After two years from last renewal
118. Which rate is applicable for import payment?
a. TT and OD selling Rate b. B.C Selling Rate
c. TT Documentary Rate d. OD Transfer Rate

119. Most important document of title of goods-

a. Warehouse Receipt b. Bill of Lading
c. Trust Receipt d. Letter of Hypothecation
120. ROE stands for-
a. Return of Equity b. Return of Earning
c. Reverse of Equity d. Reverse of Excess
121. Export & Import Policy are issued by-
a. Ministry of Finance b. Ministry of Commerce
c. Bangladesh Bank d. Court of Law
122. Packing Credit:
 Export financing,
 Validity 90 days,
 Interest Rate 7%,
 Primary Security: Export LC
 PC is a Demand Loan
123. EDF (Export Development Fund):
 It is a Demand Loan
 Validity 06 months
 This is a funded facility.
 Primary security: Export L/C
124. LIM:
 This is a post-import finance
 Validity 90 days
 Primary security: Pledge of imported goods.
 This is a demand loan
125. LTR:
 This is a post-import finance.
 Validity 90 days
 Primary security: Letter of Trust Receipt.
 This is a demand loan
126. PAD:
 It is a demand loan.
 Validity 21 (Twenty-One) days.
 Primary security: Shipping documents
Abbreviation:

UCPDC: Uniform Custom and practices for documentary credit

URC : Uniform Rules for Collection

URR : Uniform Rules for Reimbursement

NFCD : Non Resident Foreign Currency Deposit A/c

 Foreign Trade @iq_11
ACU : Asian Clearing Union

AD : Authorized Dealer

BOI : Board of Investment

C&F : Cost & Freight

CCI&E: Chief Controller of Import & Export

LIBOR: London Inter-Bank Offered Rate

FDI : Foreign Direct Investment

FERA : Foreign Exchange Regulation Act

FMJ : Form of Money and Jewellery

FOB : Free on Board

EDF : Exporter Development Fund

ERC : Export Registration Certificate

IRC : Import Registration Certificate

ICC : International Chamber of Commerce

LBPD : Local bill purchased and discounted

FBPD : Foreign bill purchased and discounted

LCAF : Letter of credit authorization form

LIM : Loan against Imported Merchandise

RFCD : Resident Foreign Currency Deposit A/c

PSI : Pre Shipment Inspection