Q&A , C@2

1. What is payment by open account? What are the risks for the exporter if he
accepts payment by open account?
2. What is Export credit insurance?
3. What is a bank guarantee?
4. Distinguish Export credit insurance and Bank Guarantee?
5. What are some limitations of Export Credit Insurance?
6. What should be noted on a marine Bill of Lading for it to be acceptable as a
shipping document under a Letter of Credit?
7. What method of payment makes late payment impossible?
8. Distinguish Irrevocable and Revocable Letter of Credit?
9. Distinguish the Confirmed and Unconfirmed L/C.
10. If a letter of Credit requires “a full set of original air waybills” to be
submitted, what will be the problem for the exporter?
11. Why do exporters greatly prefer confirmation of credit from their bank?
12. Distinguish Partial shipments and Shipment in installments.
13. Explain the two principles that make letters of credit safe for both exporter and
buyer: Autonomy and Strict compliance.
14. Why do people ask for a Prepayment Guarantee?
15. In terms of guarantee, what does it mean by “without demur or objection”?
16. What are some common guarantees in business? Explain each of them briefly.
17. What is a Conditional Guarantee?