1.

A L/C with amount of 10000, Qty 1000 Pcs with CIF terms is transferred for an amount of 5000, Qty
1000 Pcs. What should be the minimum percentage of insurance cover required in the transferred credit?
A) 100%
B) 110%
C) 200%
D) 220%

2. Which of the following statements is false regarding an airway bill?

A) Unless otherwise the documentary credit requires the AWB to show flight date, issue date will be
considered as shipment date
B) If a documentary credit prohibits transshipments, an AWB evidencing transshipment is acceptable
provided it covers the entire journey stipulated in the credit
C) An airway bill identifying airport of departure and airport of destination through IATA codes is not
acceptable
D) A requirement for a full set of original AWB will be satisfied by presentation of one original AWB
marked “original for shipper”

3. A documentary credit is issued for USD 10000 on 01 Jan. The credit expires on 31 Oct The terms of
the credit state “This credit is revolving on a cumulative basis on the first of every month”. The following
drawing have taken place under the credit
15 Jan – USD 8000
15 Feb – USD 12000
15 April – USD 10000
15 June – USD 15000
What is the balance available under the Credit as of 01 July ?

A) 25,000
B) 10,000
C) 35,000
D) 15,000

4. Which of the following Insurance Document is acceptable ?

LC Condition :
Insurance Policy in Originals for 110% of the Invoice Value covering all risks

Invoice Details
Goods Value : 10,000
Less Discount : 1,000
----------
Total 9,000
----------

A) Insurance Policy for USD 9,900.00 covering all risks

B) Insurance Certificate for USD 9,900.00 covering ICC(A)
C) Insurance Certificate for USD 11,000.00 covering all risks as per ICC(A)
D) Insurance Policy for USD 12,000.00 covering all risks excluding war risk

5. Which of the following presentations will be acceptable under a L/C which prohibits partial shipments?
A) Two bills of lading showing shipment from the same port of loading on the same vessel to different
ports of discharge
B) Three Air Waybills showing shipment from the same air port on three different flights to the same
destination
C) Three Railway Receipts showing shipment on three different wagons of the same train
D) Two Courier receipts issued by the same courier company issued on two consecutive days

6. Bank A issues a letter of credit and nominates Bank B as the negotiating bank. When does Bank B
assume the credit risk of Bank A ?
A) When Bank B agrees with the beneficiary to negotiate document
B) When Bank B negotiates documents under the L/C
C) When Bank A issues the L/C nominating Bank B as the negotiating bank
D) When the L/C is received by the beneficiary
E) Consider the following.
LC Condition :
Field 46A: Documents Required
+ Commercial Invoice in 2 Originals
+Packing List in 2 Originals
+Bill of Lading consigned and notify the Applicant marked Freight Prepaid

Field 47A: Additional Condition

+ Goods should be shipped on a Vessel no more than 15 Years of Age.

Beneficiary presented the documents and no mention was made of the age of the Vessel.
Nominated Bank should

a. Disregard the clause treating it as Non-Documentary Condition

b. Ask beneficiary to confirm the Vessel’s Age
c. Refuse the documents as irregular
d. Seek clarification from the Issuing Bank

7. Applicant requires you to issue a Documentary Credit requiring shipment from Seller’s Warehouse in
Hongkong to Buyer’s Warehouse in China. Documents required by the Credit are (a) Signed Invoice in 3
Originals, (b) Cargo receipt by Applicant’s forwarder in Hongkong. Which of the following
INCOTERMS best suit this kind of a Credit ?
A) DDP
B) EXW
C) FOB
D) CIP

8. A nominated bank negotiates the beneficiary’s documents against their indemnity in respect of certain
discrepancies. They forward the documents to the issuing bank for payment. Which of the following
statements are true
A) Nominated bank is obliged to list the discrepancies on their schedule
B) Issuing bank is obliged to seek applicant’s waiver of discrepancies
C) Issuing bank is obliged to send a notice of rejection if they are not prepared to pay.
D) All of the above

9. Which of the following scenarios will be considered as partial shipment by banks?

A. Documents presented included two truck way bills both dated 13 Oct and showing Chennai as the
place of receipt and Bangalore as the place of delivery. One stated truck registration no. as TN07 4122
and the other stated registration no. as TN09 7845
B. Documents presented include two sets of charter party bills of lading showing two different ports of
loading and onboard date but with the same vessel name, voyage number and port of discharge
C. Documents presented include two sets of railway bills evidencing shipment from Chennai to Mumbai.
One stated shipment on Train no. 6216, Wagon no. 20 and the other stated shipment on Train no. 6216,
Wagon no. 21
D. Documents presented include two sets of postal receipts both stamped at Chennai on 15 Oct 05
showing goods dispatched to New Delhi.

10. Forfaiting means with-recourse purchase of export receivables by banks or financial institutions. What
is wrong with this statement?
A) With-recourse
B) Purchase
C) Export
D) Receivables

11. Under a payment by negotiation, how can the seller obtain immediate payment?
A) By requesting immediate payment in exchange for a sight bill of exchange
B) By negotiating a discounted price for a bill of exchange
C) By negotiating with IB to use the deliverable goods as collateral for a cash loan

12. When using letters of credit in international trade, which of the following would NOT be desirable
from a seller's point of view?

A) Straight Bill of Lading

B) Letter of Indemnity
C) Warranty of Title

13.In a back-to-back letter of credit, which of the following CANNOT differ between the two letters of
credit?
A) The name of the beneficiary
B) The Expiry date
C) The list of underlying transport documents

14. Under a receipt and undertaking letter of credit, to whom is a loan extended, and under what
condition?
A) Seller against a receipt and undertaking signed by the buyer
B) Buyer against a receipt and undertaking signed by the seller
C) Seller against a receipt and undertaking signed by the seller

15. Which of the following clauses or notations appearing on the face of the Transport Document would
preclude it from being accepted ?
A) Oil drums are leaking
B) Highly flammable material
C) Potentially explosive material
D) Refrigerated seafood, may spoil during voyage

16. An insurance document is presented under a documentary credit showing sum assured as USD10,000.
A loss is incurred for a value of USD1,500. Which of the following statements is FALSE ?
1. If the insurance is marked 10% franchise, claims payable will be USD1,500
2. If the insurance is marked 10% excess deductible, claims payable will be USD500
3. If the insurance is marked irrespective of percentage, claims payable will be USD1,500
4. If the insurance is marked irrespective of percentage, claims payable will be USD10,000

A. 1, 2, 3 & 4
B. 3 & 4
C. 4 only
D. 2, 3 & 4

17.The issuing and reimbursing bank have a 2-day pre-debit arrangement. The reimbursing bank receives
a claim on 16-May (Fri). What is the LATEST date by which the claim should be processed? (Saturday
and Sunday are not banking days)
A. 19-May
B. 21-May
C. 23-May
D. None of the above

18. If a “Bank-to-Bank Reimbursement” is under URR, the I/B has to indicate that the same in:
A. Reimbursement Authorization
B. Letter of Credit
C. Reimbursement Amendment
D. Both A and B

19. All reimbursement authorizations must be issued in the form of:

A. Tele Transmission
B. Authenticated Tele Transmission
C. Signed Letter
D. Either B or C
E. Either A, B or C

20. AA, New York(Reimbursing Bank) receives a MT742 on 01Oct09(Friday) with value
01Oct09. Latest by which date AA, NY should process the claim? (AA, NY has its weekly holidays on
Sat and Sunday)
A. 01Oct 09
B. 04Oct 09
C. 06Oct 09
D. 07Oct 09
E. 08Oct 09

21.The issuing bank issues the L/C via MT700. It should send the reimbursement authorization via
A. Signed Letter
B. MT740
C. Any of the above.

22. The reimbursement authorization shows the latest presentation day as 10 Oct 09. The Reimbursing
bank receives a claim on12 Oct 09. Can it honour the claim?

A. Yes
B. No
23. As per the reimbursement authorization, all charges are for the account of the issuing bank. The
reimbursing bank honours a reimbursement claim of $10,000.00, remits $100.00 as charges claimed by
the claiming bank and reimbursing banks charges is $200.00. How much the issuing bank should pay the
reimbursing bank:
A) $10,000.00
B) $10,200.00
C) $10,100.00
D) $10,300.00

24. A Documentary Credit stipulates ‘Shipment to be made immediately’. Which of the following
statements is applicable?

A) Shipment must be effected within 21 Days of Issuance of the Credit

B) Shipment to be effected within the Expiry Date of the Credit
C) Seek clarification from the Issuing Bank
D) Seek clarification from the Beneficiary

25.Presentation of multiple transport documents will not be considered as partial shipments, if?

i. Shipment was effected on same means of conveyance

ii. Shipment was for the same journey
iii. Shipment was bound for the same place of destination

A) (i) and (ii)

B) (i) and (iii)
C) (ii) and (iii)
D) All of the above

26.If the credit calls for a courier receipt marked freight prepaid, banks will accept a courier receipt

A) which appears to be dated in the place from which the credit stipulates the goods are to be shipped
B) which mentions freight charges is payable by a party other than the consignee
C) issued by an expedited delivery service
D) all of the above

27 ABC Co. has entered into a contract with XYZ Ltd to ship Iron Ore from Chennai to Busan. The
incoterms specified in the contract is CFR Busan. ABC Co’s mine is located 100 kms from Chennai and
ABC Co plans to transport the goods from its mine to the port by Trucks. Which of the following
statement correctly reflects the risks & responsibilities of ABC Co & XYZ Ltd?
a. Risk of loss / damage to the goods after they are loaded on the trucks is for XYZ Ltd’s account.
b. Risk of loss / damage to the goods till the vessel reaches Busan is for ABC Co’s account
c. Risk of loss / damage to the goods while they are being unloaded in Busan is for the account of XYZ
Ltd
d. XYZ Ltd is responsible for arranging the vessel if the shipment is to be effected by charter party.

28. Your customer has approached a manufacturer to buy 1000 pairs of shoes, the various prices quoted
by the manufacturer are as follows
EXW – 10000
FOB – 10500
CIF – 11500
DDP – 13000
Your customer has checked independently and received the following quotes for the same shipment they
are

All licensing and loading costs (in exporting country) – USD 500
Main Carriage cost – USD 1000
Minimum insurance cover – USD 500
Unloading costs, inland transport (in importer’s country) and import duties – USD 1500

What quote of the exporter your customer should accept?

a) EXW
b) FOB
c) CIF
d) DDP

29.You bank has issued a letter of credit with the following condition in field 46A
Certificate of origin issued by a chamber of commerce.

Which of the following certificate of origin will be acceptable under the credit?

a) C/O issued on the letter-head of the chamber of commerce and signed by the chamber of commerce
b) C/O is issued in a blank form (no letterhead), signed by the beneficiary and countersigned by chamber
of commerce.
c) C/O issued on the letter head of the beneficiary, signed by the beneficiary and countersigned by the
chamber of commerce
d) C/O issued by the government of the beneficiary’s country on their letter head and countersigned by
the chamber of commerce.

1) A Only
2) A & B
3) A, B & C
4) A, B, & D

30. Beneficiary made a presentation under a documentary credit, with the following terms
Partial shipments not allowed
Shipment from China
Quantity – 100000 Mts
Tenor – 30 days after shipment
Presentation period – 10 days after shipment
Latest shipment date – 10th March
The presentation consisted of three party bills of lading showing details as follows
B/L no. 1 - 35, 000 Mts – Port of discharge: Chennai
On board the vessel FeederV.1A on 01 March at Shekou, China
On board the vessel Voyager V. 2 on 12 March at Shanghai, China
B/L no. 2 – 35, 000 Mts – Port of discharge: Chennai
On board the vessel Feeder V.1A on 03 March at Chiwan, China
On board the vessel Voyager V.2 on 12 March at Shanghai, China
B/L no. 3 - 35, 000 Mts – Port of discharge: Chennai
On board the vessel Feeder V.1A on 06 March at Mawan, China
On board the vessel Voyager V.2 on 12 March at Shanghai, China

Which of the following statement is true?

a. Maturity date is 11 April
b. Partial shipment effected
c. Documents must be presented within 16 March
d. Late shipment effected

i) A & D
ii) B Only
iii) B & C
iv) C Only

31. LC states 44A as Europe

44E as Europe
44F as China
44B as China
Transport Document presented evidences Place of Receipt as Hudson street, Germany, Port of Loading as
La Spezia Italy, Port of discharge as New York, USA Place of delivery as New York.
Transport Document evidences received for shipment date as 30th Oct 09, Onboard date as 3rd November
2009, Issue date as 5th November 2009. Shipment date is
a. 30-10-09
b. 3-11-09
c. 5-11-09
d. None of these
.
32.LC details.
LC issue date : 24-Aug-09
LC Issuing Bank: ABC Bank Sydney.
LC is available with/By: ABC Bank Sydney by Deferred Payment
LC expiry date: 30th Sep 09 at Australia.
Beneficiary: Nithya Garments, Korea
Applicant: Elizabeth Company Pty Ltd, Sydney
Issuing Bank receives the documents on 15th Sep 09(Wednesday). What is the Latest date where Issuing
Bank can refuses the documents(Assume there are not Bank Holidays in between except Saturday and
Sunday)
a. 21-Sep-09
b. 22-Sep-09
c. 20-Sep-09

33. Bank I issued an irrevocable documentary credit available with Bank N by negotiation against
presentation of conforming documents. However Bank I receives documents from Bank B stating that all
terms and conditions are complied with and they have negotiated documents. Which of the following
statements BEST describe the options available to Bank I?
A) Examine documents, if they are compliant pay Bank B
B) Examine documents, if they are compliant pay Bank N
C) Return documents to Bank B stating they are not authorized to negotiate
D) Send documents to Bank N for negotiation

34. Financial standby supports

A) Obligation to pay for losses arising from a default of the applicant in completion of the underlying
transaction
B) Obligation to pay money, including any instrument evidencing an obligation to repay borrowed money
C) Obligation of an applicant to pay for goods or services in the event of non-payment by other methods
D) Obligation of the applicant to execute a contract if the Applicant is awarded a bid.

35A documentary credit allowing partial shipment is issued with the following shipment schedule.

Quantity Shipment period

1000 Yards From 15th March Until 15 April
2500 Yards before 30 April
2000 Yards From 10 May till 25th May
3000 Yards before 31st May

Which of the following shipments made by the beneficiary under the L/C is acceptable?

E) 2625 Yards shipped on 15th March

1050 Yards shipped on 04th April
2000 Yards shipped on 25th May
2850 Yards shipped on 18th May

F) 3850 Yards shipped on 15th April

1800 Yards shipped on 15th May
3000 Yards shipped on 28th May

G) 2400 Yards shipped on 04th April

5250 Yards shipped on 27th May

H) 6800 Yards shipped on 14th April

2125 Yards shipped on 14th May

i) A & B
ii) B & C
iii) A & D
iv) C & D