International Trade Operations
Review Questions
Course Introduction
International Trade Operations explores the practical aspects of global commerce, focusing on the processes and procedures involved in exporting and importing goods and services. The course covers topics such as international logistics, documentation, payment methods, risk management, trade compliance, and the roles of key parties such as freight forwarders, customs brokers, and government agencies. Students gain an understanding of how international contracts are executed, how goods move across borders, and the legal and regulatory frameworks governing cross-border transactions. Case studies and real-world scenarios are used to illustrate challenges and best practices in managing international trade operations efficiently and compliantly.
Recommended Textbook
International Logistics Management of International Trade Operations 3rd Edition by David
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Chapter 1: Introduction
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Q1) Consumer mobility refers to the idea that consumers like to find the same products everywhere.An example of a company that sells products everywhere in the world because its customers are all over the world is
A) McDonald's Restaurants.
B) Intercontinental Hotels.
C) Fuji Film.
D) All of the above
E) None of the above
Answer: D
Q2) The concept that encompasses the heritage of a country's population,including their language,their customs,their traditions,their morals,and their beliefs is that country's
Answer: culture
Q3) The North American Free Trade Association (NAFTA)includes only the United States and Canada.
A)True
B)False
Answer: False
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Chapter 2: International Supply Chain Management
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Q1) Which of the following is NOT among the challenges of international logistics?
A) infrastructure differences
B) insurance complexities
C) superstructure differences
D) paperwork requirements
E) None of the above
Answer: C
Q2) Logistics is often defined as the activities that deal with the physical aspects of the movement of goods.
A)True
B)False
Answer: True
Q3) Logistics management encompasses ____________________ activities than does supply chain management.
Answer: fewer,less
Q4) The person responsible for the creation of containers in 1956 was named Malcom McLean.
A)True
B)False
Answer: True
Page 4
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Chapter 3: International Logistics Infrastructure
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Q1) The current trend in shipbuilding is toward post-Panamax ships.
A)True
B)False
Answer: True
Q2) Protection of goods when they have to wait at one or more points in transit have to do with a port or country's ____________________ infrastructure.
Answer: warehousing
Q3) Because work in modern ports goes so fast,there is no need for warehousing space.
A)True
B)False
Answer: False
Q4) The only water link between the Black Sea and the oceans is
A) the Corinth Canal.
B) the Danube River.
C) Lake Saint Clair.
D) the Bosporus Strait.
E) None of the above
Answer: D
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Chapter 4: Methods of Entry into Foreign Markets
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Q1) A distributor takes much less risk in its relationship with an exporter than does an agent and experiences much lower costs.
A)True
B)False
Q2) Maquiladoras are located on the border between
A) France and Germany.
B) Spain and Portugal.
C) Quebec and Ontario.
D) the United States and Mexico.
E) None of the above
Q3) While agents,because they are small businesses,are in many countries protected by that country's labor law,distributors,because they tend to be larger and are assumed to be more sophisticated,are covered in most countries by ____________________ law.
Q4) An advantage of gray markets is the increased amount of control that a company has over a product after it has been sold.
A)True
B)False
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Chapter 5: International Contracts
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Q1) The "perfect tender" principle means delivered goods must exactly conform to the goods contracted and delivered within the framework specified in the contract.
A)True
B)False
Q2) In judging whether or not a contract has been breached,the Uniform Commercial Code (UCC)applies the principle of "perfect tender." This means that
A) there must be a cash exchange to enforce the contract.
B) the UCC treats the matter the same as the CISG.
C) the parties must refer to their oral agreements, not to what they have written.
D) the goods and their delivery must exactly conform to what was written in the contract.
E) None of the above
Q3) When a territory clause in an international distribution contract makes an agent/distributor an exclusive representative,it essentially grants a ____________________ to the representative.
Q4) How trade secrets and other strategic advantages are to be handled is included in a _____________________ clause of a contract.
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Chapter 6: Terms of Trade or Incoterms
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Q1) It is always best to use only one term of trade in a quote to a potential customer so that there is no possible confusion.
A)True
B)False
Q2) FOB is
A) Free On Board.
B) an Incoterm that can be used for any merchandise.
C) an Incoterm specifically designed for ocean transportation.
D) All of the above
E) None of the above.
Q3) Conceptually,the CPT Incoterm is the same as the CFR Incoterm,except it applies to goods shipped by means other than ocean transport,or shipped by sea without being handed over the ship's rail (roll-on-roll-off cargo or intermodal containers).
A)True
B)False
Q4) Under the CFR Incoterm,until the merchandise has cleared the ship's ____________________,it is the responsibility of the exporter,after that,of the importer.
Q5) The Incoterm CPT means "____________________ Paid To."
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Chapter 7: Terms of Payment
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Q1) The UPC 600 is
A) used only in open accounts.
B) normally not used when a letter of credit is issued through the SWIFT network.
C) the Universal Customs and Practice for Documentary Credit, 2007 revision, Publication 600 of the International Chamber of Commerce.
D) All of the above
E) None of the above
Q2) Since a draft (or a bill of exchange)is a legal document in the importing country,the courts in the importing country would consider non-payment by an importer as a domestic issue.
A)True
B)False
Q3) Because of the risks associated with open-account transactions,when an exporter is forced for competitive reasons to offer an open account,the exporter should acquire credit ____________________ on those sales.
Q4) A letter of credit is more secure than cash in advance.
A)True
B)False
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Chapter 8: Currency of Payment (Managing Transaction
Risks)
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Q1) SDR,an artificial currency,is designed to ____________________ the U.S.dollar in its role as the international currency.
Q2) In an options market hedge there is the option to sell or purchase certain currencies at a certain exchange rate either on or before a certain date.The agreed-upon exchange rate is called the
A) international leverage.
B) trade dimension.
C) leveraging currency.
D) transaction exposure.
E) None of the above
Q3) One strategy a company can follow to protect itself from currency fluctuations is use of
A) a letter of credit.
B) risk retention.
C) forward market hedges.
D) All of the above
E) None of the above
Q4) The Ex-Im Bank is the curator of the SDR.
A)True B)False
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Chapter 9: International Commercial Documents
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Q1) An air waybill
A) is always straight.
B) is also used in ocean transportation.
C) serves as an individual validated export license.
D) can serve as a shipper's export declaration.
E) None of the above
Q2) The commercial invoice
A) is sent ahead of the shipment.
B) is the same thing as a letter of credit.
C) replaces the need for an export license.
D) All of the above
E) None of the above
Q3) EDI is
A) Electronic Data Interchange.
B) an electronic exchange of documents from computer to computer.
C) based upon a legal agreement between sender and recipient.
D) All of the above
E) None of the above
Q4) One of the requirements for a U.S.shipper's export declaration is for exports valued at more than ____________________ per item category.
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Chapter 10: International Insurance
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Q1) Dangerous cargo can only travel by ocean,not by air.
A)True
B)False
Q2) Since there is no problem with inherent vice in air transport,it is not listed as an exclusion in air freight insurance policies.
A)True
B)False
Q3) "Warehouse-to-Warehouse" coverage is an extension to the traditional
A) All Risks policy.
B) With Average policy.
C) Free of Particular Average policy.
D) All of the above
E) None of the above
Q4) Warehouse-to-Warehouse coverage is an extension to the traditional All Risks,With Average,and Free of Particular Average policies.It is an integral part of the Institute Marine Cargo Clause policies for Coverages A,B,and C,for which it is called "Transit" clause.
A)True
B)False
Q5) Most cargo sent by air has ____________________ value.
Page 12
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Chapter 11: International Ocean Transportation
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Q1) At least 200,000 people are employed in dismantling old ships on the beaches of Pakistan,Bangladesh,and India.
A)True
B)False
Q2) NVOCCs are
A) not regulated by the Federal Maritime Commission.
B) prohibited in North America.
C) rarely involved in LCL freight.
D) All of the above
E) None of the above
Q3) Standardized units of cargo on a LASH ship have a capacity of
A) 385 metric tons of deadweight tonnage.
B) 385 long tons.
C) 500 metric tons of deadweight tonnage.
D) 500 long tons.
E) None of the above
Q4) Containerization is increasing in international shipping.
A)True
B)False
Q5) The deepest draft a ship can sit is called the ____________________ line.
Page 13
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Chapter 12: International Air Transportation
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Q1) The aircraft that can carry freight and passengers on the main deck are called mixed aircraft.
A)True
B)False
Q2) The largest cargo airport in the world is at ____________________.
Q3) Which of the following sustainability initiatives have not been adopted or tested by airlines and/or airports?
A) use of bio-fuels to power aircraft engines
B) changes in the routing of aircraft to reduce fuel consumption
C) reduced air speed to reduce carbon emissions
D) use of airports outside of large cities to limit noise during night activities
E) All of the above
Q4) The largest cargo airport in the world is Miami,Florida.
A)True
B)False
Q5) Quick-change aircraft can be easily transformed from carrying one type of cargo to another.
A)True
B)False
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Chapter 13: International Land and Multi-Modal Transportation
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Q1) Twenty-foot containers are 6.1 meters.
A)True
B)False
Q2) Although there are some standardization attempts,most air freight ____________________ are designed to fit a specific aircraft.
Q3) Much trade at the United States-Mexico border is handled A) by ocean.
B) DAF.
C) involving trucks not regulated by weight, length, and other equipment standards.
D) All of the above
E) None of the above
Q4) Companies involved in the Customs-Trade Partnership Against Terrorism (C-TPAT)have been given expedited Customs clearance at border crossings,through the use of
A) Free and Secure Trade (FAST) lanes.
B) Secure and Safe Speedy (SASSY) lanes.
C) Security of Free Trade (SOFT) lanes.
D) Cleared Transportation (CT) lanes.
E) None of the above
15
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Chapter 14: Packaging for Export
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Q1) When goods needing refrigeration travel by ocean,they usually travel in a refrigerated container,a specialized contained also nicknamed a
Q2) Consumer packages abroad are generally smaller in countries where retail shopping is done frequently.
A)True
B)False
Q3) Some shippers use old pallets as spacers (dunnage)to keep cargo from shifting.
A)True
B)False
Q4) Characteristic(s)of fiber drums is/are
A) they are more resistant to pilferage than bags.
B) they can readily be rolled on their sides.
C) they are resistant to mechanical damage such as that caused by forklifts or sharp corners.
D) All of the above
E) None of the above
Q5) Containers designed for air transport cannot be used in other modes,except for one ____________________-foot container that can be used in cargo planes and trucks.
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Chapter 15: International Logistics Security
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Q1) The C-TPAT program operates very much within the guidelines established by the SAFE initiative.
A)True
B)False
Q2) A security policy that emphasizes 100-percent inspection is the best method for detecting explosives.
A)True
B)False
Q3) The policy of a one-hundred-percent inspection is considered flawed because A) the costs are staggering.
B) the amount of room it requires is greater than what is normally available.
C) the personnel needed is very large.
D) it is ineffective.
E) All of the above
Q4) ____________________ is a strategy that attempts to eliminate all imports of a particular type of goods and all entries of a specific group of persons into a country.
Q5) The ____________________ initiative coordinates the efforts of Customs authorities worldwide in their effort to combat terrorism.
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Chapter 16: Customs Clearance
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Q1) A substantial tax break to companies that use imported parts as components of the products they export is called a duty drawback.
A)True
B)False
Q2) The tax an importer must pay in order to be allowed to let goods into the country is called ____________________.
Q3) Required documentation for entry into essentially all countries includes
A) a form designated for entry, a Certificate of Origin, and a commercial invoice.
B) a bill of lading, EDI documentation, and a value-added tax certificate.
C) a packing list, health certification, and corporate identification.
D) All of the above
E) None of the above
Q4) In most countries,the general process of clearing Customs begins with
A) a declaration of "liquidation."
B) the filing of an "entry."
C) a declaration that the goods are "cleared."
D) a review of grounds for a protest.
E) None of the above
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Chapter 17: Using International Logistics for Strategic Advantage
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Q1) Generally speaking,a writer would use International English to ensure that communication is
A) clear.
B) unambiguous.
C) devoid of cultural references.
D) All of the above
E) None of the above
Q2) Arabic is among the easiest languages to learn,because it has a relatively simple grammar.
A)True
B)False
Q3) In considering the speed at which an e-mail from a foreign interlocutor should be answered,the best strategy is to ____________________ what has been observed from other contacts in that country.
Q4) When a foreigner does not understand something that a native English speaker is saying,it is best for the native speaker to repeat the sentence again,and add an explanation (or to rephrase the sentence after it is repeated).
A)True
B)False
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