In a(n) __________ incoterm, the buyer bears all costs and risks and arranges for shipping.

The correct choice highlights the EXW (Ex Works) incoterm, which places the maximum responsibility on the buyer. Under this incoterm, the seller has minimal obligations; they are required only to make the goods available at their premises or another named place.

In this arrangement, the buyer assumes all costs and risks associated with the transportation of the goods once they are made available by the seller. This means that the buyer is responsible for arranging and paying for the entire logistics process, including transportation, insurance, and all associated costs from the seller's location to the final destination. The EXW incoterm is particularly favorable to sellers as it minimizes their responsibility and exposure to risk, while it can impose a significant logistical burden on the buyer, who must coordinate all aspects of transportation.

Other incoterms provide varying degrees of responsibility and obligation to the buyer and seller, reflecting the inherent division of costs and risks in international trade. For instance, FOB (Free On Board) means that the seller is responsible for costs and risks up to the point the goods are loaded onto a shipping vessel, after which responsibility transfers to the buyer. CIF (Cost, Insurance, and Freight) further involves the seller covering costs up to the destination port, including insurance