How Do International and Domestic Practices of Settling Trade Transactions

question 70

Multiple Choice

How do international and domestic practices of settling trade transactions differ?

• A) In an international transaction, a formal promise to pay is required before the buyer can obtain the merchandise.
• B) In an international transaction, the seller usually ships merchandise on an open account.
• C) In a domestic transaction, a draft is used to settle trade transactions.
• D) In an international transaction, the exporter sends a commercial invoice that specifies the amount due and terms of payment to the importer.
• E) In an international transaction, there is more trust between the exporter and the importer than in a domestic transaction.

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Definitions:

Promissory Note

A finance-related written assurance where one party obligates to pay the other a clearly defined monetary amount, either when required or at a particular future time.

Discounted

Refers to the process of determining the present value of a future amount of money or stream of cash flows given a specific rate.

TD Canada Trust

One of Canada's prominent banking and financial services providers, known for offering a wide range of personal and business banking solutions.

GICs

Guaranteed Investment Certificates are financial products in Canada offering an assured interest rate over an agreed-upon term.