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Definition of Promissory Note
An unconditional promise in writing made by one person(the maker or issuer) to another(the payee or holder), signed by the maker engaged to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or bearer.
Unit 12 International Settlement (I)
Financial activities that call for international payments
1. Commercial settlements 2. Payments for the services rendered 3. Payments between governments 4. Transfer of funds among countries 5. Others payments, such as overseas remittances,
educational expenses, inheritan源自文库e, etc.
International payment methods
Cash in advance Letter of credit Documentary collection Open account
Payment Risks to the Seller (Exporter)
Definition of Cheque
An unconditional order signed by the drawer who entrusts the bank or other financial organisations to pay a sum certain in money to the payee or the bearer of it.
Payment Risks to the Buyer (Importer)
Factors in payment decision
1. The credit standing of the buyer 2. The amount involved 3. Availability of foreign exchange in the buyer’s country 4. Types of exchange controls in the buyer’s country 5. Political conditions in the buyer’s country 6. Type of merchandise to be shipped 7. Customs in the trade 8. Market conditions: a buyers’ market or sellers’ market 9. Payment terms offered by competitors
documentary collection? Why? 6. Suppose you are a buyer importing from a famous
company. What is your chance of settling an open account deal?
Parties to a Bill of Exchange
The three basic parties to a Bill of Exchange The drawer The drawee The payee Other parties to a Bill of Exchange Acceptor Endorser Endorsee Holder Guarantor
International trade payment risks
1.Credit risks 2.Exchange risks 3.Transfer risks 4.Political risks
Bill of Exchange
"A Bill of Exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer".
Questions
1. In your opinion, which country receives more remitted education expenses, China or USA? Why?
2. When would the buyer agree to sell on cash in advance? 3. Why would most traders choose letter of credit? 4. Why is open account least risky for the buyer? 5. Will the seller surely receive payment under
