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BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016

BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016 Last 3-year examination papers Notes Study Material Unit wise Semester Wise content.

BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016
BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016

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BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016 | Index

BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016 page.1

BBA 3rd Year 604 International Trade Examination Sample Model Mock Test Paper 2016 page.2

B.B.A. Examination, May 2016

International Trade



Note: Attempt all the sections as per instructions.


(Very Short Answer Questions)

Note: Attempt all the five questions. Each question carries 3 marks. Very short ans required not exceeding 75 words. (3 x 5 = 15)

1. What do you understand by foreign trade?

Ans. Refer to Unit-il, Sec-A, 0.8.

2. What do you understand by free trade?

Ans. Refer to Unit-II, Sec-A, 0.13

3. What is EXIM policy?

Ans. Refer to Unit-V, Sec-A, 0.1.

4. What are the popular payment methods in foreign trade?

Ans. The popular payment methods in foreign trade are:

(a) Cash-in-advance: With this, the exporter can avoid credit risk because payment is re are the ownership of the goods is transferred.

(b) Letters of Credit: It is one of the most secure instruments available to a foreign commitment by a bank on behalf of the buyer that payment will be made to the exporter.

(c ) Documentary Collections: It is a transaction whereby the exporter entrusts the collection a payment to the remitting bank which sends documents to a collecting bank along with instructions for payment.

(d) Open Account: It is a sale where the goods are shipped and delivered before payment is due, which is usually in 30 to 90 days.

5. What is meant by balance of payments?

Ans. Refer to Unit-II, Sec-A, Q.1.


(Short Answer Questions)

 Note: Attempt any two questions out of the following three questions. Each question carries

(7.5 x2 = 15) 7.5 marks. Short answer is required not exceeding 200 words.

6. Describe the main problems which are faced in international trade.

Ans. Refer to Unit-1, Sec-B, Q.2.

7. Explain the different modes of payment in international trade.

Ans. Modes of Payment in International Trade: Some of the safer and widely recommended and accepted modes of payment for international trades are:

Cunt Payments: Open account is a mode of payment in which the entire products

  • Open Account Payments: Open account is a mode of payment in which the entire products ordered by the buyers are being shipped and delivered to him by the sellers and the sellers agree to ordered by the buyers are being shipped an take payment after some period of the time. Mostly in open account payment, the money is being paid 20 60 or 90 days from the day of the delivery. This mode of payment is though to the exporter after 30, 60 or 90 days from th risky for the exporter because the importer will get control over the products even before making any  payment but it help exporters in getting more and more buyers.
  • (b) Payment in Advance. In this mode of payment the entire value of the ordered being paid by the buyer well-in advance. It is the best mode of payment for an exporter because he gets the value of his roducts even before making the delivery. Any exporter will love to accept this mode of payment. But it is a risky method for the importer as he can’t get his payment back if the exporter fails to deliver the products as described in the quotation or on documents. 
  • (C) Letter of Credit: The most widely recommended and happily accepted mode of payment is the letter of credit. The letter of credit is a document issued by the bank of the importer, where the importer’s bank acts as a guarantor on behalf of the importer and gives the exporter a surety that the importer will make the payment if the exporter will fulfil the delivery terms as mentioned in the letter of credit.
  • (d) Documentary Collection: In this mode of payment, both the buyer’s and the seller’s bank come into the picture. The exporter forward the goods through shipping without getting any payment but possesses control over the products through the shipping documents that the buyer will be needing for getting the products. After shipping the products, the exporter submits all the relevant documents including the bill of exchange, official invoice of the products and the shipping documents to his bank The exporter’s bank then send these documents to the buyer’s bank.

Once the buyer accepts the official invoice and signs the bill of exchange and make the payment in his bank, he gets the shipping document against which he can get the goods. This is known as documents against payment. If the buyer accepts the bill of exchange and legally agreed to make the payment on a fixed date and collect the shipping documents and clear the goods, this is known as document against acceptance. Here, the exporter and the sellers are likely to be in less risky situations.

(e) Consignment: Consignment terms of payment are highly acceptable by the importers. It is a moderated form of open account payment. The seller receives the payment only when the buyer sells the products to their end consumers. The buyer only receives and manage the products but the products are owned by the seller only till these are being sold to the third party. The buyer or the importer have the least risk in this method. The buyer has to pay only if the products are being sold. After a fixed date, according to the legal contract between the seller and the buyer, the buyer can make the payment or can return the unsold product to the exporter.

  • 8. What is the difference between balance of payment and balance of trade?
  • Ans. Refer to Unit-II, Sec-C, Q.2.


(Detailed Answer Questions)

Note: Attempt any three questions out of the following five questions. Each question carries 15 marks. The answer is required in detail.(15 x 3 =45)

9. Give description of efforts made by government for export promotion in India.

Ans. Refer to Unit-IV, Sec-C, Q.9.

10. What is marketing research? Explain the objectives of international marketing research.

Ans. Marketing Research: ‘Marketing research is the careful and objective study of product design, markets and such transfer activities as physical distribution and warehousing, advertising and sales management! -Clark and Clark

 ‘Marketing research is the inclusive term which embraces all research activities carried on for the management of marketing work, the gathering, recording and analysing of all facts about problems relating to the transfer and sale of goods and services from producer to consumer -Harry Hapner

From the above definitions, it is clear that marketing research is concerned with tackling the problems emerging from the beginning to the final stage of marketing process.

Objectives of International Marketing Research

Marketing Research is undertaken for attaining the following objectives:

(a) To Provide Basis for Proper Planning: Marketing and sales forecast research provides sound basis for the formulation of all marketing plans, policies, programmes and procedures.

(b) To Reduce Marketing Costs: Marketing research provides ways and means to reduce marketing costs like selling, advertisement and distribution, etc.

(c) To Find out New Markets for the Product: Marketing research aims at exploring new markets for the product and maintaining the existing ones.

(d) To Determine Proper Price Policy: Marketing research is considered help formulation of proper price policy with regard to the products.arketing research is considered helpful in the

(e) To Study in Detail Likes and Dislikes of the Consumers: Marketing research tries to out what the consumers, (the men and women who constitute the market) think and want. It keeps us in touch with the consumers minds and to study their likes and dislikes.

(f) To Know the Market Competition: Marketing research also aims at knowing the quan competition prevalent in the market about the product in question. The company

ce for reliable information about competitor’s moves and strategies which are of immense significance further planning.

(g) To Study the External Forces and their Impact: Marketing research provides valuable information by studying the impact of external forces on the organisation. External forces may include conditions developing in foreign markets, govt. policies and regulations, consumer incomes and spending habits, new products entering in the market and their impact on the company’s products.

Prof. Gilies has rightly pointed out that, ‘The basic objective of marketing research is to supply management with information which will lead to a full understanding of the distribution habits and attitudes of present and potential buyers and users and their reactions to products, packing, selling and advertising methods’.

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