4) Some correspondents will not extend credit facilities to the bank with nostro account and

offer a preferential account, so that conducting business will become more convenient and easier.(T)

4. Multiple Choice

1) From the point of view of a Chinese bank, __B__ is our bank’s account in the book of an

overseas bank, denominated in foreign currency. A. a vostro account B. a nostro account C. a mirrio account D. a record account

2) A bank gets to know its exact position of funds by __A___ A. reflecting the credit balance B. examining the mirror account C. consulting a foreign bank D. checking the nostro account

3) Statements of balance of international payment don’t include __D__ A. current account B. capital account C. balancing account D. visible account

4) __A__ refers to an exchange of services or assets between countries. A. Invisible trade B. Visible trade

C. International trade D. Balance of trade

5) Each country has to earn __B__ to pay for imports. A. money

B. foreign exchange C. cash D. currency

5.Answer the following questions

1) How will ratio of earning be divided?

Ratios of earning can be divided into ratio of capital return (Earning/ Total Capital, ROE) and ratio of asset return (Earning/ Total Capital, ROE) .

2) Why do banks develop the correspondent relationship with foreign banks?

For the purpose of rendering best service to the banks’ clients, it is essential for the banks to develop direct correspondent relationship with foreign banks and offer more diversified banking services, thereby playing an increasingly prominent role in promoting and regulating the growth of the national economy.

3) What do American banks and European banks usually do in their financial activities?

American banks are active in marketing their products and services in the field of fund clearing, Trade finance has always been the main subject of correspondent banking

operations by many European banks for quite a long time. 4) What should the correspondent files be?

The correspondent files should be concise, but complete, and updated.

Chapter 4

1. Put the following phrases into English 大小写金额 无条件的书面支付命令 远期汇票 跟单汇票 无条件的支付承诺 流通工具 amount in words and figures unconditional order of payment in writing term bill documentary draft unconditional promise of payment negotiable instrument 2.Put the following sentences into English

1) 由于这张信用卡的持卡人不讲信用，发卡银行将取消该卡。

The issuing bank of this credit will cancel the holders card because of his poor credit standing.

2) 旅行支票易于在国外银行、旅店、商店、机场等兑现。

Traveler’s checks are easily encashabkes, hotels, ships and airports abroad. 3) 汇票和本票的定义有一些相似之处。

There are some similarities between the definition of a bill of exchange and a promissory note.

4) 请开立一张以Mr. Smith为付款人的金额为2000美元的即期汇票。 Please draw a sight draft on Mr. Smith for US dollars 2000.

2. True or False

1) In check transaction, the drawer and the payer are the same person.(T) 2) A check is a demand bank draft.(T)

3) A draft is a conditional order in writing.(F)

4) The person who draws the bill is called the drawer.(T) 5) Any usance bills need to be accepted.(T) 6) There is no acceptor in a promissory note.(T)

7) There are only two parties in a promissory note.(T) 8) Traveller’s checks are negotiable instruments.(T) 9) Traveller’s checks are fixed, round amounts.(T)

10) A line of credit is given by a bank according to the cardholder’s financial status.(T)

3. Multiple Choice

1) A check must be signed by __A__. A. the drawer B. the drawee C. the payer D. the payee

2) When financing is without recourse, this means that the bank has no recourse to the __D__

3)

4)

5)

6)

if such drafts are dishonored. A. drewee B. payee C. payer D. drawer

A time bill may be accepted by the __B__ A. drawer B. drawee C. holder D. endorser

__A__is drawn by the exporter and sent to the buyer. A. Draft

B. Promissory note C. I.O.U D. Check

Taveller’s checks are in __D__ amounts. A. fixed B. round

C. convenient

D. fixed, round and convenient

If a bill is a __D__ bill, the documents will be handed over against payment of the bill. A. tenor B. sight C. clean

D. documentary

5. Answer the following questions

1) Under which circumstances do banks usually ask for endorsement?

Bank usually ask for endorsement of check when the check in favour of joint payees is credited to a sole account and when the check is cashed over the counter. 2) What are the essentials of a draft?

The essentials of a draft are as follows: an unconditional order; in writing; signed by the person giving it; drawee; payment date; a sum certain in money; payee; date and place of issuance of a draft; bearing the words” exchange for”. 3) What is meant by a documentary bill?

A documentary bill refers to one that is accompanied by the relevant documents that are needed to complete the export transaction.

4) What is the important difference between the bill of exchange and the promissory note?

The important difference between the bill of exchange and the promissory note is that the promissory note is written and signed by the person who promises to make the payment (the buyer), and sent to the person who is owed the money (the exporter). A bill of exchange, in contrast, is drawn by the exporter and sent to the buyer (who “accepts” term bill).

5) How many parties are there in a promissory note? What are they?

There are two parties in a promissory note, and they are maker and holder. Chapter 5

1.Put the following phrases into English 海外分支机构和代理行 汇款人账户 SWIFT密押 授权签字 overseas branches and correspondent banks remitter’s account swift authentication key authorized signature financial institution 金融机构 2.Put the following sentences into English

1) 由于电信业的迅猛发展，大多数的付款业务都是通过电汇方式完成。

With rapid telecommunication, most payment transactions are handled by telegraphic transfer. 2) 再付款业务中总是会出现一些差错。

In the process of payment transfer, some mistakes may occur.

3) 处理付款业务员中的典型错误是将头寸付款方式和链式付款方式的报文混淆。

It is a typical mistake to confuse the message types of the cover method with those of the serial method.

4) 在一些国家，通常用于国内付款的链式方式也用于跨境付款。

In some countries and for some currencies, the serial method --- typical for domestic payments --- is also used cross-border.

5) 电汇常常用于大写金额和时间较紧的情况。

T/T is often used when the remittance amount is large and the transfer of funds is subject to a time limit.

3. True or False

1) Remittance refers to the transfer of funds from one party to another among different

countries through banks.(T)

2) Mail transfer can be replaced in the time of telecommunication developed rapidly.(F)

3) Under the serial payment method, the instruction to credit a beneficiary account is dent

together with the instruction to debit sender’s account.(T)

4) Serial payment method cannot, however, delay the payment between different time

zones.(F)

4. Multiple Choice

1) The remitting bank checks the documents received __D__. A. as a service to its clients B. to avoid unnecessary C. before sending them out D. all of the above

2) Large payments should be made by __D__ A. TT B. SWIFT C. MT