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Money and credit - Ivanov V.М.

Control questions

1. Definition of international settlements.

2. The main intermediaries in international settlements.

3. Factors affecting the state of international settlements.

4. Monetary and financial terms of foreign trade contracts.

5. Methods of insurance of risks in international practice.

6. Types of protective clauses.

Tests for self-control

1. International settlements are:

A) organization of payments in foreign economic activity;

B) a system for organizing and regulating payments on monetary claims and obligations arising in foreign economic activity between states;

C) the system of organization and regulation of payments for monetary claims and obligations arising in foreign economic activity between organizations and citizens located on the territories of different countries;

D) the system of organization and regulation of payments for monetary claims and obligations arising in foreign economic activity between banks located on the territories of different countries;

E) all the answers are correct;

E) the answers b), c) are correct.

2. The main intermediaries in international settlements are:

A) States through special authorities;

B) insurance companies;

C) clearing companies;

D) banks;

E) transnational corporations;

E) the answers a), b), c), e) are correct;

G) all the answers are correct.

3. The "nostro" account is an account on which:

A) instructions of foreign banks in this bank;

B) payments for international transactions;

C) instructions of this bank in foreign banks;

D) overdrafts;

E) holdings;

E) the answers a), e) are correct;

G) all the answers are correct.

4. Specify an approach when choosing a strategy to protect against currency risks:

A) decision-making on special measures for insurance of currency risks;

B) insurance of part of the contract (open currency position);

C) selection of a specific method of risk insurance;

D) selection of a specific risk insurance method;

E) internationalization of monetary relations;

E) the answers a), b), c), e) are correct;

G) all the answers are correct.

5. Protective clauses may be:

A) gold;

B) currency;

C) multicurrency;

D) commodity-price;

E) combined;

E) the answers b), c), d) are correct;

G) all the answers are correct.

A task

AKB Kyiv has opened a renewed documentary letter of credit for the Ukrainian shipment of timber worth $ 20,000 per month to the Ukrainian company Ukrexport. The world price of wood is $ 12.5 per 1 m3, the supply condition is CIF, any European port. The lots of wood on the dates indicated are resold as follows:

Payments of final buyers were made against bills of exchange, issued with payment 1 month after the specified date. The deal was financed through an overdraft on the foreign currency account of a Ukrainian company in a bank in US dollars. In each case, the payment under the letter of credit was executed and debited to the account in US dollars 10 days after each shipment. The substituting invoices and the necessary drafts submitted to the final consignees are dated two days later.

Using additional information, determine the financial result of the Ukrainian company.

The fee for documentary credit and collection was $ 137.50 (debited after the completion of all transactions), overdraft charge 16% per annum (365 days per year).

Information on exchange rates for US dollars: