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marine insurance contract article 3 of the indian marine insurance act 1963 defines marine insurance contract as it is an agreement whereby the
nature of cargo insurance policya marine or cargo insurance policy has an international character and therefore a policy taken in one country is
commercial dimension from the point of view of an exporter a transaction is complete as soon as the importer either pays for the bill of exchange on
legal dimension when the goods are in transit from the exporter to the importer they are at different stages in the custody of different agencies
need for cargo insurance why should the goods be insured there are two reasons for securing the insurance cover the first reason concerns the legal
introduction cargo insurance commonly known as marine insurance occupies an important position in international business it provides protection
objectivesafter studying this unit you should be able to 1 describe the need of cargo insurance in international business2 explain various kind of
ecgc schemes for covering exchange risks the ecgc has evolved two schemes to provide greater protection to exporters of capital goods and turnkey
cancellation and extension of forward contracts if the exporter is not able to deliver even within the option period he may approach to the bank
currency options as you have learnt the forward contract protects the interest of the holder against the risk of adverse movements in exchange rates
forward contracts as you have learnt that entering into forward contract is one of the important method of dealing with the foreign exchange risk
methods of dealing with foreign exchange risksa firm can deal with foreign exchange risks in the following ways1 taking risk the firm may decide to
risk as an importer the position is entirely opposite of what it is for the exporter if the importer is billed in rupees he does not stand to loss
risk as an exporter you may draw your export bills either in rupees or in foreign currencies if you have drawn your export bills in indian currency
identification and measurement of exchange risks in foreign trade you may be either an exporter or an importer let us now examine what is the
bill rate bill rate may also be either bill buying rate or bill selling rate let us discuss them in detail i bill buying rate this rate is applied
tt telegraphic transfer rate telegraphic transfer rate may be either tt in detail tt buying rate this rate is applied for purchase of foreign
distinction between spot and forward rates you have learnt what spot and forward rates are let us now explain the distinction between both rates
forward quotations forward rates can be expressed in two ways commercial customers are usually quoted the actual price which is referred to the
forward rate the rate quoted for delivery of foreign exchange in future at some agreed date ie when the value date is more than two business days in
spot rate the current exchange rate is usually the spot rate it is the rate at which most foreign exchange transactions are carried out if the
definition of exchange rate a foreign exchange rate is simply the price of one countrys money in terms of another countrys money in other words the
meaning and nature of exchange rates during the great depression of the 1930s almost all countries found it difficult to increase their exports many
introduction you have learnt about export credit insurance in unit 9 as you know export business involves exchange of currency of one country for
objectivesafter studying this unit you should be able to1 explain the meaning of exchange rate2 describe various types of exchange risk3