Chapter Nineteen E xports and imports Chapter objective This chapter discusses the microstructure of international trade
INTERNATIONAL FINANCIAL MANAGEMENT EUN / RESNICK Second Edition 19 Chapter Nineteen Exports and Imports Chapter Objective: This chapter discusses the microstructure of international trade
Chapter Outline A Typical Foreign Exchange Transaction ° forfaiting Government Assistance in Exporting a The Export-Import Bank and Affiliated Organizations ● Countertrade forms of countertrade generalizations about Countertrade McGraw-Hilylrwoin 19-1 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rights
McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 19-1 Chapter Outline ⚫ A Typical Foreign Exchange Transaction ⚫ Forfaiting ⚫ Government Assistance in Exporting ◼ The Export-Import Bank and Affiliated Organizations ⚫ Countertrade ◼ Forms of Countertrade ◼ Generalizations about Countertrade
A Typical Foreign exchange Transaction Over the years,(centuries, really) an elaborate process has evolved for handling exports and Imports Figure 19. 1 illustrates this process McGraw-Hilylrwoin 19-2 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rights
McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 19-2 A Typical Foreign Exchange Transaction ⚫ Over the years, (centuries, really) an elaborate process has evolved for handling exports and imports. ⚫ Figure 19.1 illustrates this process
Process of a Typical Foreign Trade Transaction Purc hase order Importer Shipment of goods Exporter 吧 Eei9B/A Money Market s≌巨 Investor 三 PVB/A 5月39o Face value of b/a >四 Letter of credit Shipping documents and time draft accepted Importers Bank Exporters Bank Payment-discounted value of b/A McGraw-Hilylrwoin 19-3 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rights
McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 19-3 Process of a Typical Foreign Trade Transaction Importer’s Bank Exporter’s Bank Importer Exporter Purchase order Shipment of goods Letter of Credit Shipping Documents and time draft accepted Payment-discounted value of B/A Money Market Investor B/A Face value of B/A PV B/A
Forfaiting o Forfaiting is a type of medium-term financing used to finance the sale of capital goods It involves the sale of promissory notes signed by the importer in favor of the exporter The forfait, usually a bank, buys the notes at a discount from face value from the exporter o The exporter gets paid and does not have to carry the financing McGraw-Hilylrwoin 194 Copyright@ 2001 by The McGraw-Hill Companies, Inc. All rights
McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 19-4 Forfaiting ⚫ Forfaiting is a type of medium-term financing used to finance the sale of capital goods. ⚫ It involves the sale of promissory notes signed by the importer in favor of the exporter. ⚫ The forfait, usually a bank, buys the notes at a discount from face value from the exporter. ⚫ The exporter gets paid and does not have to carry the financing