Exercises II

〈Remittance 〉

Ⅰ.. True or False:

1. DD stands for a means of remittance, which makes use of a demand draft. ( )

2. MT is a quicker method of payment than a banke r’s draft. ( )

3. Among TT, MT and DD,TT is the cheapest method of payment. ( )

4. A further advantage of TT over MT is that there is no danger of instructions being

delayed or lost in the post. ( )

5. In the case of MT, the remitting bank issues a draft to its customer, and directs its

foreign branch or correspondent by mail to make the payment to the beneficiary.

( )

6. Banks keep two types of international account, vostro and nostro accounts. ( )

7. SWIFT stands for Society for Worldwide Interbank Financial Telecommunications.

( )

8. SWIFT is the speediest form of payment. ( )

9. The normal practice now is to send all mail transfers by airmail. ( )

10. The operation of a telegraphic transfer is just the same as the mail transfer. ( ) II.. Multiple Choice:

1.If the London’s bank makes a payment to a correspondent abroad, ____.

A.it will remit the sum abroad

B.the foreign bank’s vostro account will be cr edited.

C.the London bank’s nostro account will be credited.

D.Either A or B

2.If Barclays instructs Citibank to pay a sum of US $100000 to Midland, its nostro

account should be ____.

A. credited

B. debited

C. increased

D. decreased

3.When a customer asks its bank to make a telegraphic transfer to a beneficiary abroad,

the charges may ____.

A.be paid by either the remitter or the remittee

B.be debited against the nostro account

C.be credited to the vostro account

D.be paid by the remitting bank

4.If an importer asks his bank to make a telegraphic transfer to an exporter abroad, he

should ____.

A.pay the home currency equivalent of the sum in foreign currency

B.pay the banks commission