a) Banks would comfortably decrease foreign trade devoid of trade-related services as
types of trade would only take place if banks reverse the business deal with bankers’
b) The approval of a banker ensures reimbursement of the exporters to ensure that the
importer’s credit risk is not compromised. Also, the importers are allowed to import
merchandise without the fear of being turned away because of the importers’ credit
a) Sales could be improved by an exporter if they allow an exporter to provide payment
b) If the importer works for an unknown company, there would be an immense credit
peril to the exporter.
a) Countertrade comprises of the trade of goods from one country to another in
exchange for goods to the exporting country.
4. The Overseas Private Investment Corporation covers candid U.S. assets overseas against
the possibilities of expropriation, currency inconvertibility, and other possible dangers.
Moreover, the OPIC presents insurance coverage for exporters that depend on external
Business and Management 3
a) The Russian Bank allotted a letter of credit by the U.S. exporter to pledge
reimbursement for the exported goods.
b) If the letters of credit are not reliable to the exporters, their course of action would
have faith in the counter-party in the trade contract. By doing this, exporters will
reduce trade as they do not have enough knowledge of the counter-party.
c) Governments ensure that the letters of credit are followed through by the bank. If
not, any country that does not wager on its guarantees would be reluctant to trade.
d) A U.S. bank would offer a letter of credit to the U.S. exporter and the
accountability of payment would fall on the bank. This way, the bank ought to ask
for payment from a Russian importer or their bank.