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MKT 4358 - QUIZ 11
Terms in this set (45)
Acceptance Letter Of Credit
A draft (or a bill of exchange) accepted by the drawee (acceptor) by putting his signature and 'accepted' on its face. In doing so, he commits himself to pay the bill upon presentation at maturity.
This bank is a correspondent of a bank which issues a letter of credit, and, on behalf of the issuing bank, this bank notifies the beneficiary of the terms of the credit, without engagement on its part to pay or guarantee the credit.
One who applies to his bank to issue a documentary credit; in the majority of credits issued the applicant is an importer of goods.
Bank (ers) Acceptance
A time draft drawn on, and accepted by, a bank. They are limited to 6 months in the US. They may be kept to maturity or sold.
A payee or recipient, usually of money. A party in whose favour a documentary credit is established, usually the exporter.
Carriage paid to (CPT)
An INCOTERM indicating the Seller delivers the goods to the named carrier but the Seller must also pay the cost of carriage necessary to bring the goods to the named destination.
Carriage, insurance paid to (CIP)
An INCOTERM indicating the Seller delivers the goods to the named carrier but the Seller must also pay the cost of carriage necessary to bring the goods to the named destination and minimum insurance against damage or loss in transit.
Cash Against Documents (CAD)
A term used in collections supported by shipping documents which are released to the Buyer only against payment. Same as Documents Against Payment (D/P).
Cash in Advance (CIA)
A credit term where Buyer pays for the merchandise or services in full before shipment or any service benefits can be derived.
A bank involved in the collection process. In this process if presentation is made to the drawee, it also becomes 'the presenting bank'.
In the USA, a bank that is authorized to accept demand deposits. It may also receive time deposits, make loans, engage in trust services, issue letters of credit, accept and pay drafts, rent safe deposit boxes and engage in many other similar activities.
Confirmed Letter of Credit
A L/C issued by a foreign bank whose validity has been confirmed by a domestic bank. This is in addition to the commitment of the opening bank.
Primarily European entities that use their credit where their client has customers with a high cost of funds or are located in a country with an uncertain credit environment.
A bank that, in its own country, handles the business of a foreign bank.
Cost and freight (CFR)
An INCOTERM indicating the cost of the product and freight is included in the Seller's quoted price to a named destination. All other charges are the Buyer's responsibility.
Documents Against Payment
Payment for goods without a guaranteed form of payment in which the documents transferring title to the goods are not given to the buyer until he/she has signed a sight draft.
Cost, insurance and freight (CIF)
An INCOTERM indicating the cost of the product, minimum insurance, and freight is included in the Seller's quoted price to a named destination. All other charges are the Buyer's responsibility.
Delivered Duty Unpaid... named place of destination (DDU)
An INCOTERM indicating the Seller has fulfilled its obligation to deliver when the goods have been made available at the named place in the country of importation. Seller bears most costs and risks involved in bringing the goods thereto.
Documentary Letter of Credit
A L/C that requires receipt of specified documents before the transaction can be completed.
Documents Against Acceptance
Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer (or drawee) only upon the buyer's acceptance of the attached draft
Ex Works named place (EXW)
An INCOTERM indicating Seller has fulfilled its obligation to deliver when it has made the goods available at its premises (i.e. works, factory, warehouse, etc.) to Buyer. Seller is not responsible for loading the goods on the provided transport vehicle.
Free Alongside Ship named port of shipment (FAS)
An INCOTERM indicating Seller has fulfilled its obligation to deliver when the goods have been placed alongside the vessel on the dock (quay) at the named port of shipment. Buyer bears all costs and risks of loss / damage to the goods from that moment on.
Free Carrier (FCA)
An INCOTERM meaning the cost, risk and responsibility shift from Seller to Buyer when goods are turned over to a carrier at a specified place. If place is the Seller's site, Buyer must pay the pre-carriage to the main carrier's terminal.
Free on board (FOB)
An INCOTERM meaning Seller is required to transport the goods to the named port of export and arrange for export clearance. Risk, cost, and responsibility shift to Buyer when the goods pass over the carrying ship's rail.
Free on Board named place (FOB)
An INCOTERM indicating title and responsibility pass to the customer at the named location.
A set of international standards for the uniform interpretation of common international trade contract clauses.
Irrevocable Letter of Credit
An L/C which cannot be amended or canceled without prior mutual consent of all parties to the credit.
Letter Of Credit (L/C)
A commitment, usually by a bank on behalf of a client, to pay a beneficiary a stated amount of money under specified conditions for merchandise or services rendered.
Credit extended that is not supported by a note, mortgage, or other formal written evidence of indebtedness.
Goods or property sent by the aid of a carrier from one person (the consignor) to another (the consignee).
Collect on Delivery, a service where the purchase price of a shipment is collected by the carrier upon delivery of the shipment and subsequently paid to the shipper.
Prepaid (PPD) Charges
This transportation term means that all charges, including freight, are to be paid by the Shipper. Or, it may mean that only those charges designated as 'prepaid' are to be paid by the Shipper with other charges to be collected from the Receiver.
Revocable Letter of Credit
An L/C that can be amended or cancelled at any time by either the originator or the payee.
A draft that is payable on demand.
Society for Worldwide Interbank Financial Transactions (SWIFT)
Network through which international banks conduct their financial transactions.
Statutes enacted to prevent dumping - offering prices in the overseas market that is lower than that at which a product is sold in its home domestic market.
Prices on intracompany sales
Competitive or reactive pricing
Entering a market with a relatively low price as a means of gaining market share.
The practice of setting a relatively high price for a product, often for the purpose of increasing margins in markets that are somewhat price inelastic.
Standby Letter of Credit
A L/C which a bank issues on behalf of its customer to serve as a guarantee to the beneficiary of the L/C that the bank's customer will perform a specified contract with the beneficiary. If the customer defaults, the beneficiary may draw funds.
A financial instrument that is payable within a specified time period.
A draft drawn by Seller of goods upon Buyer who agrees to pay by signing 'accepted' on the draft.
Transferable Letter of Credit
A Letter of Credit authorizing the beneficiary to transfer the right to receive the proceeds of the letter to another party.
Unconfirmed Letter Of Credit
A type of L/C bearing the obligation of the issuing bank only, not of any other bank.
THIS SET IS OFTEN IN FOLDERS WITH...
MKT 4358 - Quiz #1 Vocabulary
MKT 4358 - Quiz #2 Vocabulary
MKT 4358 - Quiz #3 Vocabulary
MKT 4358 - Quiz #4 Vocabulary
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