An Importer in Germany Requests a Price Quotation from a Cotton

question 52

Multiple Choice

An importer in Germany requests a price quotation from a cotton broker in Memphis.The broker wishes to place the cotton in the hands of a multimodal terminal operator in Memphis for shipment through the port of New Orleans.He will pay the freight charges through to the German seaport,but he wishes the risk of loss to the cotton to pass to the German importer as soon as he places the cotton in the hands of the multimodal terminal operator in Memphis.The broker should quote his prices for the cotton:

• A) CIF Germany.
• B) FOB New Orleans.
• C) CPT New Orleans.
• D) Ex Factory.
• E) None of these are correct.

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Definitions:

Expected Return

The anticipated average return of an investment over a given period, factoring in all possible outcomes.

Portfolio Return

The overall gain or loss generated by an investment portfolio over a particular period of time, taking into account both capital gains and income received.

Expected Return

The anticipated average return from an investment based on its probable profits.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.