Finance Case Study

1. Describe the dilemmas or concerns of buyers/importers and sellers/exporters in international trade.

2. Explain Mohanty’s business decision problem.

3. Explain the various payments options available in international business, and their relative merits and demerits for exporters and importers.

4. Explain the various risks in international trade. Identify risks that are common in domestic trade and risks that are unique to international trade. Explain the methods for managing these risks.

5. Identify the most crucial risk when an exporter deals with new clients from developed countries. Explain the best payment method for mitigating commercial (default risk). How should Mohanty manage the commercial risk her company is facing?

6. Explain the concept and mechanics of a Documentary Letter of Credit (DLC) and its application in international business (see attached exhibit). How does a Documentary Letter of Credit (DLC) work as a credit enhancement device for importers and a credit risk mitigating tool for exporters?

7. Provide a detailed explanation of What you Have Learned from the Case.

*Instructions*

-Answers must be numbered 1-7

-Answers must be 2-5 paragraphs

-Due February 17th, 2021 by 3pm