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NEW QUESTION: 1
First National Bank, a U.S. bank, is contacted by Manufacturing Company, InC. , a U.S. company, to finance its transaction with Country Z, a boycotting country. Payment will be made through a letter of credit in favor of Manufacturing Company at its U.S. address. First National Bank knows that the letter of credit will contain restrictive boycott conditions that
would prevent the bank from implementing it. First National Bank suggests to Manufacturing Company, InC. , that it set up a shell corporation in Country Y, a nonboycotting country, and have the shell corporation be the beneficiary of the letter of credit. Does First National Bank have any problem with this transaction?
A. No. The transaction is set up to evade the regulation, but First National Bank is not liable because Manufacturing Company, In , actually effected the transaction.
B. No. First National should have Manufacturing Company, InC. , sign a statement accepting full responsibility for the establishment of the shell corporation.
C. Yes. The transaction is set up to evade the regulation and First National Bank is liable.
D. No. The transaction is now not subject to Department of Commerce regulations because the beneficiary is not a U.S. company.
Answer: C

NEW QUESTION: 2
For any scoring model, you can define a set of automation rules to guide the implementation of credit decisions without user intervention. Under what situation are automation rules preferred?
A. When credit risk defined by an enterprise's policies is minimal
B. When credit risk defined by an enterprise's policies is moderate
C. When credit risk defined by an enterprise's policies is unrated
D. When credit risk defined by an enterprise's policies is high
Answer: A

NEW QUESTION: 3

A. Option D
B. Option A
C. Option C
D. Option B
Answer: B
Explanation:
Topic 10, Mix Questions B

NEW QUESTION: 4
When one party trades a variable interest rate for a fixed interest rate or vice versa then __________ occurs.
A. Interest rate swap
B. Forward contracts
C. Option
D. Future contracts
Answer: A