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1、1. Usually the low interest rate currency trades at a _ to the high interest rate currency in the forward market. A. premium B. par C. discount D. bar 2. Which of the following statements about standby letters of credit is true？ _. A. They can serve as a guarantee to a buyer against a seller default
2、ing B. They are contrary to the general rule that letters of credit may only be used for the actual movement of goods C. They are unlike a tender bond in their legal standing and method of operation D. They are unlike a tender bond with its fixed expiry date 3. The most liquid of all assets is _. A.
3、 the stock of commercial banks B. M 1 C. intelligence D. the debt of major corporations 4. Beta and standard deviation differ as risk measures in that beta measures _. A. only unsystematic risk， while standard deviation measures total risk B. only systematic risk， while standard deviation measures t
4、otal risk C. both systematic and unsystematic risk， while standard deviation measures only unsystematic risk D. both systematic and unsystematic risk， while standard deviation measures only systematic risk5. What information would you find in a statement of cash flows that you would not be able to g
5、et from the other two primary financial statements？ _. A. Cash provided by or used in financing activitiesB. Cash balance at the end of the period C. Total liabilities due to creditors at the end of the period D. Net income 6. An analyst estimates that a stock has the following probabilities of retu
6、rn depending on the state of the economy： State of economyProbabilityReturn Good 0.1 15% Normal 0.6 13% Poor 0.3 7%The expected return of the stock is _. A. 7.8% B. 11.4% C. 11.7% D. 13.0% 7. According to the rules of debit and credit for balance sheet accounts _. A. increases in asset， liability， a
7、nd owners equity accounts are recorded by debits B. decreases in asset and liability accounts are recorded by credits C. increases in asset and owners equity accounts are recorded by debitsD. decreases in liability and owners equity accounts are recorded by debits8. Individuals will accept the mediu
8、m of exchange in return for goods and services only if they are confident that _. A. the inflation rate is zero B. it possesses intrinsic value C. they can pass it on to others D. they can exchange it for gold 9. When a countrys currency appreciates， the countrys goods abroad become _ and foreign go
9、ods in that country become _. A. cheaper. more expensive B. more expensive. cheaper C. cheaper.cheaper D. more expensive. more expensive 10. A US company is bidding for a contract in China. Its Chinese customer asks for a performance bond. What is the most likely course of action？ _. A. It asks its
10、bank to issue a tender bond which can be converted into a performance bond B. It gives up its bid C. It consults its bank about issuing a standby letter of credit D. It asks its bank to issue a performance bond 11. ABC Co. Ltd. has a $3 500 account receivable from XYZ Store. On March 20， XYZ makes a
11、 partial payment of $2 100 to ABC. The journal entry made on Mdrch 20 by ABC to record this transaction includes _. A. a debit to the cash received account of $2 100 B. a credit to the Accounts Receivable account of $2 100 C. a debit to the Cash account of $1 400 D. a debit to the Accounts Receivabl
12、e account of $1 400 12. Intervention in the foreign exchange market means the government _. A. restricts individuals from buying and selling foreign exchange B. restricts the importation of certain goods C. or central bank buys or sells foreign exchange D. devalues the currency in the foreign-exchan
13、ge market 13. Which of the following is not a form of countertrade？ _. A. Counterpurchase B. Buy-back C. Offset D. Balance trade 14. A credit to a revenue account _. A. decreases revenues B. increases equity C. decreases equity D. increases assets 15. If the government guaranteed that anyone wishing
14、 a job would be provided one， the likely result would be _. A. massive layoffs B. an increase in the money supply C. an increase in inflationary expectations D. the development of a barter system 17. Economists assume that most people take risks _. A. because doing so is exciting B. only when they h
15、ave no riskless alternative C. very infrequently D. if they are compensated for taking the risks 18. The Phillips Curve shows the relationship between _. A. aggregate demand and aggregate supply B. interest rates and inflation C. recessions and boomsD. inflation and the unemployment rate 19. In a fi
16、xed exchange rate system， speculative selling of a currency is based on anticipation of . A. appreciation B. devaluation C. a foreign trade surplus D. interest rate increase 20. A collecting bank is employed by _. A. the principal B. the remitting bank C. the drawer D. the drawee， who is its custome
17、r1. What are the expected returns for Stocks X and Y respectively？ _.A. 20% and 10% B. 18% and 12%C. 20% and 11% D. 18% and 5%2. Which of the following payment terms eliminates the exchange risk， assuming the exporter invoices in foreign currency？ _.A. Confirmed irrevocable documentary creditB. Open
18、 accountC. Documentary collection D/A D. None of the above3. ABC Co. Ltd. purchased a car for $ 12 000， making a down payment of $5 000 cash and signing a $7 000 note payable due in 60 days. Which of the following is not correct？ _.A. From the viewpoint of a shortterm creditor， this transaction make
19、s the business less solventB. Total liabilities increased by $7 000C. Total assets increased by $12 000D. This transaction had no immediate effect on the owners equity in the business4. Which of the following terms of payment will entirely eliminate country risk？ _.A. Revocable documentary creditsB.
20、 Confirmed Irrevocable documentary credits C. Documentary collection D/PD. Documentary collection D/A5. The expiry date of a documentary credit is Sunday， 24 February， and documents have to be A presented to you. Which of the following is an acceptable presentation？ _.A. Presentation to you on Monda
21、y 25 February with the bill of lading dated 25 FebruaryB. Presentation on Monday 25 February with the bill of lading dated Sunday 24 FebruaryC. Presentation on Tuesday 26 February with the bill of lading dated Sunday 24 FebruaryD. Presentation on Friday 22 February with the bill of lading dated Sund
22、ay 29 January6. What are the standard deviations of returns on Stocks X and Y respectively？ _.A. 15% and 26% B. 24% and 13%C. 20% and 4% D. 28% and 8%7. Who makes the first presentation of documents under a transferable credit？ _.A. Applicant B. First beneficiaryC. Second beneficiary D. None of the
23、above8. A transaction caused a $10 000 decrease in both total assets and total liabilities. This transaction could have been _.A. repayment of a $ 10 000 bank loan B. an asset with a cost of $10000 was destroyed by fireC. purchase of a delivery truck for $10 000 cashD. collection of a $10 000 accoun
24、t receivable9. Money ceases to serve as an effective store of value when _.A. the government runs large deficits B. the unemployment rate is very highC. productivity in the economy declinesD. rapid inflation occurs10. An indication that the money supply is greater than the desirable amount would be
25、.A. insufficient spending and excessive saving B. deflationC. inadequate spending and rising unemploymentD. rising wages and prices 1. Which of the following is not a function of money？ _.A. To act as a medium of exchange B. To act as a unit of accountC. To act as a store of valueD. To provide a dou
26、ble coincidence of wants E. To act as a means of payment 2. The price in the foreign exchange market is called _.A. the trade surplus B. the exchange rate C. the money price D. the currency rate 3. Market risk refers to the risk of_.A. financial prices fluctuations B. defaultC. fraud D. deferred pay
27、ments 4. Which of the following is not among the generally accepted accounting principles？ _.A. Cash basis B . Prudence C. Consistency D. Going concern E. Money measurement.5. What is a documentary letter of credit？ _.A. A conditional bank undertaking to pay an exporter on production of stipulated d
28、ocumentation B. A method of lending against documentary securityC. An international trade settlement system biased in favour of importersD. All of the above 6. Holding a group of assets reduces risk as long as the assets _.A. are perfectly correlated B. are completely independentC. do not have preci
29、sely the same pattern of returns D. have a correlation coefficient greater than one 7. An amount， payable in money goods， or service， owed by a business to a creditor， is known as a/an .A. liability B. debt C. equity D. asset8. What function is money serving when you buy a ticket to a movie？ _.A. st
30、ore of value B. a medium of exchange C. transaction demand D. a unit of account 9. If foreigners expect that the future price of sterling will be lower， the _.A. supply of sterling will increase， demand for sterling will fall， and the exchange rate will fall B. supply of sterling will increase， dema
31、nd for sterling will rise， and the exchange rate may or may not increaseC. supply of sterling will fall， demand for sterling will increase， and the exchange rate will riseD. supply of sterling will fall， demand for sterling will fall， and the exchange rate may or may not fall 10. The documentary col
32、lection provides the seller with a greater degree of protection than shipping on _.A. open account B. banks letter of guaranteeC. bankers draft D. documentary credit 11. Which of the following statements is not true of central banks？ _.A. They pay the governments salaries B. They always undertake th
33、e regulation of the banking system C. They are always the lender of last resortD. None of the above 12. When GBP/USD rate goes from 1.6150 to 1.8500， we say the dollar _.A. appreciates by 12.70% B. depreciates by 14.55%C. depreciates by 12.70% D. appreciates by 14.55% 13. According to diversificatio
34、n principle in investment， suppose you invest Stock X and Stock Y with equal funds， which of the following is not true？ _.A. If X and Y are totally independent with each other， the risk of the portfolio is reduced B. If X and Y are perfectly negatively correlated， the risk of the portfolio is perfec
35、tly offsetC. If X and Y are perfectly positively correlated， the risk of the portfolio is neither reduced nor increasedD. If X and Y are perfectly negatively correlated， the risk of the portfolio is neither reduced nor increased 15. The main liability on a bank balance sheet is _.A. deposits B. capi
36、tal and reservesC. loans and overdrafts D. cash 16. _ shows that net income for a specified period of time and how it was calculated.A. The income statement B. The capital statementC. The accounting statementD. The statement of financial condition 17. Why must the liabilities and assets of a bank be
37、 actively managed？ _.A. Because assets and liabilities are not evenly matched on the same time scale B. Because assets and liabilities are evenly matchedC. Because the interbank market uses LIBORD. Because assets and liabilities can be underwritten 18. If the expected returns of two risky assets hav
38、e a perfect negative correlation， then risk .A. is increased B. falls to zero C. is unaffected D. is reduced by onehalf 19. A possible disadvantage of freely fluctuating exchange rates with no official intervention is that .A. some nations would experience continual deficits B. the exchange rates ma
39、y experience wide and frequent fluctuations C. nations would no longer be able to undertake domestic policies designed to achieve and maintain full employmentD. nations would need a larger supply of international reserves than otherwise 20. What are your GBP/USD position and the average rate if you
40、sell 4m at 1.6350 buy 5m at 1.6340 and sell $5m at 1.6348？ A. Short 2 058 478.10 long $3 370 000 at 1.6371 B. Long 5 941 521.90 short $9710 000 at 1.6342C. Short 5 941 521.90 long $9 710 000 at 1.6342D. Long 4 058 478.10 short $6 630 000 at 1.6336 答案： 1.D 2.B 3.A 4.A 5.A 6.C 7.A 8.B 9.A 10.A11.B 12.
41、B 13.D 14.B 15.A 16.A 17.A 18.B 19.B 20.D II. True or False Questions26. As a general rule， the shorter the maturity of an asset and the more readily it can be sold， the more liquid is the asset.27. Investors in the capital markets are not subject to any tax on their investments.28. CMO is a securit
42、y backed by a pool of passthrough rates， structured so that there are several classes of bondholders with varying maturities， called tranches.29. The purpose of the letter of credit is to facilitate trade， typically international trade by substituting the known credit worthiness of a bank for the bu
43、yer， which may be unknown or unacceptable to the seller.30. According to the Phillips Curve， the economy cannot be at full employment and stable prices at the same time. 31. When total reserves are equal to required reserves， the banking system cannot extend loans anymore.32. A bill of lading that c
44、overs the shipment of goods on two separate vessels is known as thorough bill of lading.33. Usually the more liquid asset is less risky.34. Where the bill of exchange is not accompanied by documents， these having been sent to the importer， the transaction is known as a clean collection.35. The veloc
45、ity of money is the speed with which it can be converted into a liquid asset.36. Primitive securities yield returns that depend on additional factors pertaining to the prices of other assets， while a derivative security offers returns based only on the status of the issuer.37. A car loan offered by
46、a bank is a derivative security.38. Options give buyers the obligation to buy or sell an asset at a present price over a specific period. 39. Futures contracts usually end in the delivery of the underlying commodity.40. The forward exchange rate is the current spot rate adjusted for the interest rate differentials.41. Dirty price is the bond price excluding accrued interest， i.e.， the price paid by the bond buyer.42. Every transaction must produce a debit and credit entry of the same financial amount. 43. There are three parti