Mitigating Techniques for Commercial Risk/Assessment
1. A common technique to avoid payment risk is to
- a. complete a thorough credit check on new customers.
- b. request bank support for customers.
- c. sell to customers where credit risk insurance is available.
- d. insist that customers wire funds in advance of shipment.
2. The decision as to when to utilize techniques to mitigate payment risk is
- a. determined by the contract signed by the importer.
- b. determined by the exporter’s desire to reduce its risk.
- c. determined by the exporter’s country law.
- d. provided by the sales department who know their customers.
3. A common technique of transference of payment risk is
- a. countertrade.
- b. purchasing credit insurance.
- c. forfaiting the receivable.
- d. requiring a letter of credit.
4. Credit insurance can be purchased from
- a. Ex-Im Bank.
- b. the SBA.
- c. local banks.
- d. the Chamber of Commerce.
(Correct answers: 1=d, 2=b, 3=c, 4=a.)