CDCS Sample Test 6/25

1.On 18th Mar 08, bank A receives documents from its export customer under a documentary credit issued by Bank I, with following details  # Issue date 01 Mar 08 # Valid till 21 Mar 08
Available by acceptance with drafts drawn on Bank B at 30 days from BL date

1.     Which of the following statement is true?

A.     The documents must reach bank B by 21^st March, if documents are to be sent to the nominated bank

B.      The documents can be directly dispatched to bank I on 22^nd March

C.      If documents are to be sent directly to bank I, then drafts can be drawn on

Bank I

D.     If documents are to be sent directly to Bank I, then drafts can be drawn on Bank A

a)      A & B

b)     A & C

c)      B & C

d)     B & D

2.     Which of the following statement is true?

A.               Unless otherwise stipulated in the credit, shipment can be effected prior to the issue of the credit

B.                Unless otherwise stipulated in the credit, invoice cannot be dated prior to the issue of the credit

C.                Unless otherwise stipulated in the credit, all documents can be dated prior to the issue of the credit but shipment must be effected on or after the issue date

D.               Unless otherwise stipulated in the credit, banks will accept documents dated after the expiry date of the credit

3.     Your customer presents documents under an L/c, which states the shipment to be effected in the second half of Feb. Which of the following statement is true?

A.     Marine BL showing shipment date as 14^th Feb

B.      A railway bill showing shipment date as dated 15^th Feb

C.      An Airway bill showing shipment date as 16^th Feb

D.     Such notations in L/c are not acceptable and will be ignored.

4.     Pre-advise credit is an irrevocable undertaking

A.     To be irrevocable, operative credit must be issued

B.      True

C.      False

D.     Pre-advise is not acceptable in UCP

5.     As per 13 of UCP 600, a nominated bank can also termed as

A.     Advising Bank

B.      Transferring Bank

C.      Issuing Bank

D.     Claiming Bank

6.     A documentary credit pre-advice is issued on 1 March for USD 510,000.00 with the following terms and conditions:

- Part shipment allowed.

- Latest shipment date 30 April.

- Expiry date 15 May.

On 2 March the applicant requests an amendment prohibiting part shipment and    extending the expiry date to 30 May. In accordance with UCP 600 what MUST the issuing bank do?

A.     Clarify with the applicant the period for presentation.

B.      Issue the documentary credit as originally instructed.

C.      Issue the documentary credit incorporating all the amendments.

D.     Issue the documentary credit incorporating only the extended expiry date.

7.      Bank I issued an L/c available with Bank X and sated the reimbursing bank as Bank R. On the same day, it sent a revocable reimbursement authorisation to Bank R stating that “ Upon receipt of claim from Bank Y you are authorised to reimburse them after 3 working days notification to us”. Bank I however did not state this requirement in the L/c. Due to which reimbursement to Bank X was delayed. Which of the following statements is true?

A.     Bank I is liable to compensate Bank X for loss of interest.

B.       Bank R is liable to compensate the bank X as it has delayed the payment

C.      Bank I is liable to compensate Bank X, however it can recover the charge from the applicant since it is acting according to their instructions

D.     No bank is responsible for the delay

8.      The issuing bank wants to cancel the L/c before it has been advised to the beneficiary by the advising bank. What are the options available to issuing bank

A.      ISB may cancel the L/c at any time

B.      ISB must seek permission from the advising bank before cancelling

C.      ISB must call back the L/c from advising bank and then cancel the L/c

D.     ISB must obtain consent of the beneficiary

9.      Bank that can honor & negotiate complying presentation

A.     Issuing bank

B.      Nominated bank

C.      Confirming bank

D.     B & C

10. Bank that can negotiate complying presentation

A.     Issuing bank

B.      Nominated bank

C.      Confirming bank

D.     B & C

11. Bank that can honor complying presentation

A.     Issuing bank

B.      Nominated bank

C.      Confirming bank

D.     All above

12. Which of the following can be combined under a credit available with and requiring a draft drawn on an issuing bank?

1. Payment.

2. Deferred payment.

3. Acceptance.

4. Negotiation.

A.     1 and 2 only.

B.      1 and 3 only.

C.      2 and 3 only.

D.     3 and 4 only.

13. Letter of credit issued on 20^th December 2008 indicates latest of date of  shipment as : “immediate”.  L/c expiry date is 30^th April 2009 and period for presentation is 15 days

A.     Beneficiary must ship the goods on or before 30^th April 2009

B.      Beneficiary must ship the goods on or before 15^th April 2009

C.      Beneficiary must effect shipment within 21 days

D.     Beneficiary must effect shipment within a 5 banking  days

14. If an advising bank is authorised or requested by issuing bank to add its confirmation to a credit

A.     It should definitely add its confirmation

B.      It need not add its confirmation but it should inform the issuing bank that it is not Adding confirmation.

C.      It can not advise the credit if it is not conforming the credit

D.     If can negotiate documents under the credit, only if it adds its confirmation

15. Within what period, beneficiary must confirm acceptance of L/c amendment

A.     Within 5 banking days

B.      Immediately

C.      Within 5 calendar days

D.     Not necessarily to confirm acceptance

16. If amendment SPECIFIES that beneficiary must confirm acceptance of amendment within certain period

A.     Beneficiary must comply this requirement without fail within period stipulated by the amendment.

B.      Beneficiary may or may not comply this requirement

C.      Beneficiary may contact applicant directly and seek further amendment for

      deletion of this requirement

D.     Beneficiary must inform advising bank that they are unable to decide acceptance/rejection of amendment if undecided

17. If a nominated bank refuses to honor or negotiate a presentation, that bank is no more a nominated bank.

 A. True

 B. False

 C.  Nominated bank must negotiate

 D. None

18. Which of the following statement is most appropriate as per UCP600

A.     A credit must not be issued available by drafts drawn on the applicant.

B.      A credit may not be issued available by drafts drawn on the applicant

C.      A credit may be issued available by drafts drawn on the applicant.

D.     None of above

19. Which of the following is necessary to amend the L/c

A.     Agreement of the issuing bank, confirming bank and applicant.

B.      Agreement of the issuing bank, advising bank and beneficiary

C.      Agreement of the issuing bank, confirming bank and beneficiary

D.     B & C above

20. A letter of credit calls for a bill of exchange showing tenor as “60 days from the date of shipment”. If the shipment is effected on 1^st Jan 2008, what would be maturity date?

A.     28^th Feb 2008

B.      1^st Mar 2008

C.      2^nd Mar 2008

D.     3^rd Mar 2008

21. As per usance L/c, issuing bank undertakes to effect payment at 90 days from the shipment date. Date of shipment is 1st of Dec 2008.  2nd of Dec is holiday in both beneficiary’s and applicant’s country due to Sunday

A.     90 calendar days to be calculated from 1st of Dec 2008

B.      90 calendar days to be calculated from 2nd of Dec 2008

C.      90 banking days to be calculated from 3rd of Dec 2008

D.     90 banking days to be calculated from 2rd of Dec 2008

22. When L/c is silent about period for presentation and requires no original transport documents

A.     Documents must be presented in 21 calendar days

B.      Documents must be presented within 21 banking days

C.      Documents must be presented on or before of expiry of the credit

D.     None of the above

23. A documentary credit is issued for an amount of GBP 60,000.00 and calls for drafts to be drawn at 30 days from bill of lading date. Documents have been presented with a bill of lading dated 09 November XXXX. Which of the following tenors on the draft will NOT be acceptable?

A.     09 December XXXX.

B.      30 days from bill of lading date.

C.      30 days after 09 November XXXX.

D.     30 days date, draft dated 09 November XXXX.

24. Lc was originally issued for value USD 10,000. Later it was reduced to USD 5,000 by an amendment. The beneficiary presented documents for USD 5,000. To understand whether beneficiary has accepted amendment or not, which of the following is most relevant question

A.     Was partial shipment allowed in the credit ?

B.      Did advising bank notify the issuing bank ?

C.      Both

D.     None

 ANSWERS

1.      B

2.      A

3.      C

4.      B

5.      D

6.      B

7.      A

8.      D

9.      D

10. D

11. D

12. B

13. A

14. B

15. D

16. B

17. B

18. A

19. C

20. B

21. B

22. C

23. B

24. A