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JAMB Commerce 2008 Question 26

Question 26

Foreign Trade Documents

When 'FOB' is written on a document, it implies that the buyer bears the

  1. A.cost of goods and advert
  2. B.loading costs and insurance
  3. C.insurance and transport costs
  4. D.transport and communication costs.
Show the answer and explanation

Answer: C (insurance and transport costs)

Explanation

Free on board: the seller pays until the goods are on the ship; the buyer pays the freight (transport) and insurance from there.