Mitigating Techniques for Commercial Risk/Assessment

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.)