2nd Year Principles of Banking Chapter 11 TestNon-Negotiable Instruments

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

1. Which one is the beneficiary party of a commercial letter of credit:

   1. Exporter

   2. Importer

   3. Issuing bank

   4. Importer's bank

2. Which letter of credit is issued for a single or particular transaction:

   1. Fixed

   2. Revocable

   3. Red clause

   4. Green clause

3. Which type of letter of credit authorizes the exporter to obtain an advance before the shipment of goods.

   1. Documentary letter of credit

   2. Green – clause letter of credit

   3. Confirmed letter of credit

   4. Red-clause letter of credit

4. Which of the following is useful in facilitating trade relations between the businessmen of different countries:

   1. Bank draft

   2. Money order

   3. Letter to credit

   4. Stock certificate

5. Letter of credit is used for:

   1. Local trade

   2. Provincial trade

   3. National trade

   4. International trade

6. Is carried through commercial letter of credit:

   1. Inter-provincial trade

   2. Domestic trade

   3. International trade

   4. Local trade

7. If there is no guarantee to honour a letter of credit then it is called:

   1. Confirmed letter of credit

   2. Irrevocable letter of credit

   3. Unconfirmed letter of credit

   4. None of the above

8. Which one can be crossed:

   1. Money order

   2. Postal order

   3. Credit card

   4. All of these

9. Which of the following is non-commercial letter of credit?

   1. Irrevocable letter of credit

   2. Red-clause letter of credit

   3. Special letter of credit

   4. Traveler’s letter of credit

10. “I Owe You” is a written instrument drawn by:

    1. Trader

    2. Debtor

    3. Creditor

    4. All the above