Import under CIF is.... than import under FOBAmore riskyBsaferCbetterDnot safer or more risky
Question
Import under CIF is.... than import under FOB
A. more risky
B. safer
C. better
D. not safer or more risky
Solution
The correct answer is A. more risky.
Explanation:
-
CIF (Cost, Insurance, and Freight) includes the cost of goods, insurance, and shipping costs until the goods reach the buyer's port. This means that the seller retains responsibility for the goods until they arrive.
-
FOB (Free on Board) means that the seller's responsibility ends once the goods are on the shipping vessel. The buyer assumes risks and responsibilities from that point onward.
Given these definitions, CIF can be considered more risky for the importer because:
- The seller has more control over the transport, and any issues during transit might complicate claims or resolution of disputes.
- The insurance included may not cover all risks, and if the goods are lost or damaged after the seller's responsibility ends, the buyer has to confront that risk.
Thus, compared to FOB, where the buyer has more control and understanding of risks from the point of shipment, CIF is viewed as more risky for the importer.
Similar Questions
Import under CIF is.... than import under FOBAmore riskyBsaferCbetterDnot safer or more risky
All products imported into the EU are subject to common EU safety standards.Group of answer choicesTrueFalse
The term "FOB" denotes: Group of answer choices free on board. freight on board. free only (to) buyer. freight charge on buyer.
FIFO is .a.Fast Issue Of Fast Order.b.First In First Out.c.Fast In Fast Outd.Fast Investment in Future Order.
_____________ refers to the exchange of dirty funds for another asset type.Business recyclingAsset conversionImport transactions
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.