4 Write short notes on:
a) Export credit guarantee corporation
Answer : Export Credit Guarantee Corporation is a central government undertaking body to provide credit guarantee on the default of payments by the buyer. It works as an insurance firm who guarantees export payment, if the buyer defaults in making payment.
Procedures with ECGC to cover insurance:
Once after finalizing the order, the buyer execute a purchase order to the seller with the terms and conditions as agreed by both. The purchase order should contain full details of buyer and buyer’s bank account details. The exporter approaches Export Guarantee Corporation to get approval on the buyer with amount of limit. Here, the ECGC
b Foreign exchange risk
Answer : Foreign exchange risk is the risk to the value of one’s assets when it is valued in another currency. The exchange rate of a currency to another may be volatile. It is this change in value of the currency that gives rise to foreign exchange risk. A depreciation in the currency in which your assets are denominated will result in a lowerStudents, Get Completely solved SMU MBA Spring 2014 assignments from authorized organization www.smumbaassignment.com
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