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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 defaulting
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 (or other) 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. 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 total 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 risk
5. What information would you find in a statement of cash flows that you would not be able to get from the other two primary financial statements? ______.
A. Cash provided by or used in financing activities
B. 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 return depending on the state of the economy:
| State of economy |
Probability |
Return |
| Good |
0.1 |
15% |
| Normal |
0.6 |
13% |
| Poor |
0.3 |
7% | The expected return of the stock is ______.
A. 7.8% C. 11.7%
D. 13.0%
B. 11.4%
7. According to the rules of debit and credit for balance sheet accounts ______.
A. increases in asset, liability, and owner's equity accounts are recorded by debits
B. decreases in asset and liability accounts are recorded by credits
C. increases in asset and owner's equity accounts are recorded by debits
D. decreases in liability and owner's equity accounts are recorded by debits 265
8. Individuals will accept the medium 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 country's currency appreciates, the country's goods abroad become ______ and foreign goods 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 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 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 Receivable 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-exchange 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 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转贴于 265考试网 http://www.265ks.com/
16. Given $100 000 to invest, what is the expected risk premium in dollars of investing in equities versus risk-free T-bills(U.S. Treasury bills) based on the following table? ______.
| Action |
Probability |
Expected Return |
| Invest in equities |
0.6 |
$50 OOP |
| |
0.4 |
-$30000 |
| Invest in risk-free T-bill |
1.0 |
$5000 | A. $20000
B. $18000 C. $15000
D. $13000
17. Economists assume that most people take risks ______.
A. because doing so is exciting
B. only when they have 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 booms
D. inflation and the unemployment rate
19. In a fixed 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 customer
21. The following statements describing net income are all correct except that ______.
A. net income is computed in the income statement, appears in the statement of owner's equity, and increases owner's equity in the balance sheet
B. net income is equal to revenues minus expenses
C. net income is computed in the income statement, appears in the statement of owner's equity, and increases the amount of cash shown in the balance sheet
D. net income can be determined using the account balances appearing in an adjusted trial balance
22. A strong dollar encourages ______.
A. travel to the United States by foreigners
B. purchase of American goods by foreigners
C. Americans to travel abroad
D. Americans to save dollars
23. In what circumstances would the beneficiary of a confirmed documentary credit not receive payment? ______.
A. Failure of the applicant
B. Failure of the issuing bank
C. Failure to fulfil the credit terms
D. Failure to fulfil the commercial contract
24. The balance in the owner's capital account of ABC Co. Ltd. at the beginning of the year was $65 000. During the year, the company earned revenue of $430 000 and incurred expenses of $360 000, the owner withdrew $50 000 in assets, and the balance of the Cash account increased by $10 000. At year-end, the company's net income and the year-end balance in the owner's capital account were, respectively .
A. $20 000 and $95 000
B. $70 000 and $95 000 C. $70 000 and $85 000
D. $60 000 and $75 000
25. Assume the inflation rate is expected to be 5 percent and the unemployment rate is 8 percent. If workers wish to get a 2 percent real wage increase, they should bargain for a money wage increase of______.
A. 3 percent
B. 5 percent
C. 7 percent
D. 13 percent
26. Which statement about portfolio diversification is correct? .
A. Proper diversification can reduce or eliminate systematic risk B. As more securities are added to a portfolio, total risk typically would be expected to fall at a decreasing rate
C. The risk-reducing benefits of diversification do not occur meaningfully until at least 30 individual securities are included in the portfolio
D. Diversification reduces the portfolio's expected return because it reduces a portfolio's total risk
27. Your customer is the applicant for a documentary credit. Which of the following points would appear to be illogical if they appeared on the application form? ______.
A. Invoice price shown as FOB, bills of lading to be marked freight paid
B. Last date for shipment one week before expiry date
C. Invoice price shown as C&F, but no insurance document requested
D. No mention of the latest date of shipment
28. Portfolio theory as described by Markowitz is most concerned with ______.
A. the effect of diversification on portfolio risk
B. B. the elimination of systematic risk
C. active portfolio management to enhance return
D. the identification of unsystematic risk
29. Commercial bank deposits with the central bank are part of the bank's ______.
A. net worth
B. demand deposits C. loan portfolio
D. reserves
30. Foreign trade can be conducted on the following terms except for ______.
A. open account
B. documentary collection
C. documentary credits
D. public bonds
31。risk for a security held in a diversified portfolio is ______.
A. specific risk
B. standard deviation of returns
C. reinvestment risk
D. covariance
32. The security market line depicts ______.
A. a security's expected return as a function of its systematic risk
B. the market portfolio as the optimal portfolio of risky securities
C. the relationship between a security's return and the return on an index
D. the complete portfolio as a combination of the market portfolio and the risk-free asset 33. The key factor limiting how much a commercial bank has immediately available to lend is the amount of its ______.
A. demand deposits
B. excess reserves
C. vault cash
D. savings deposits
34. A description of the current international monetary system is as follows: .
A. a free-floating system B. all currencies are pegged ( fixed in price ) to another currency or to a basket (group) of currencies
C. some currencies are pegged and some float, but few remain fixed at the same rate for very long
D. all currencies float within an agreed upon range of one another
35. In a standard spot exchange transaction, a Thursday deal is settled on _____ if the day is a business day of banks.
A. Friday
B. Saturday C. the following Monday
D. the following Tuesday
36. Open market operations are ______.
A. the tool used most often by the central bank
B. seldom used by the central bank
C. used more than the discount rate but not nearly as often as changes in reserve requirements by the central bank
D. used by the central bank only during inflationary periods
37. Given US interest rates at 2.00% and Japanese interest rates at 1.00% for the same period, where would the Interest Rate Parity Theory expect the USD/JPY exchange rate most likely to trend toward given a current spot exchange rate of 134.00 ? .
A. 135.00
B. 134.00 C. 132.00
D. It cannot be determined
38. On October 1, 2000, ABC Co. Ltd. loaned XYZ Store $300 000, receiving in exchange a nine-month, 12% note receivable. ABC ends its fiscal year on December 31, and makes adjusting entries to accrue interest earned on all notes receivable. The interest earned on the note receivable from XYZ during 2001 will amount to ______.
A. $9000
B. $18000 C. $27000
D. $36000
39. In terms of daily volume, ______ is the largest traded financial market in the world. A. the stock market
B. the mutual fund market
C. the bond market
D. the foreign exchange market
40. Which of the following practices contributes to efficient cash management? ______.
A. Never borrow money—maintain a cash balance sufficient to make all necessary payments
B. Record all cash receipts and cash payments at the end of the month when reconciling the bank statements
C. Prepare monthly forecasts of planned cash receipts, payments, and anticipated cash balances up to a year in advance
D. Pay each bill as soon as the invoice arrives
41. The danger to the exporter in open account trading is that by surrending the shipping documents to the importer, he ______ control of the goods before he has obtained payment for them.
A. is in
B. loses
C. retains
D. gives up
42. The primary purpose of showing special types of events separately in the income statement is to .
A. increase earnings per share
B. minimize the income taxes paid on the results of ongoing operations
C. prevent unusual losses from recurring
D. assist users of the income statement in evaluating the profitability of normal, ongoing operations
43. If commercial banks have ample excess reserves, a lower discount rate will _______.
A. encourage them to borrow more
B. encourage them to raise interest rates on loans
C. have little impact on bank behavior
D. increase bank reserves
44. A bill of lading is a receipt for goods. When is a bill of lading issued? ______.
A. When the shipper makes up the order
B. When the carrier receives the goods
C. When the carrier delivers the goods to the consignee
D. When the manufacturer produces the goods
45. ABC Co. Ltd. sold marketable securities costing $80 000 for $92 000 cash. In the company's income statement and statement of cash flows, respectively, this will appear as ______.
A. a $12 000 gain and a $92 000 cash receipt
B. a $92 000 gain and a $80 000 cash receipt
C. a $12 000 gain and a $80 000 cash receipt
D. a $92 000 sale and a $92 000 cash receipt
46. Which of the following central bank actions would be appropriate to combat rapid inflation? .
A. A reduction in the discount rate
B. A reduction in reserve requirements
C. A cut in taxes
D. A sale of government securities
47. In a currency pair, the first currency is referred to as ______ and the second as ______.
A. the base currency…the counter currency
B. the quote currency…the base currency
C. the base currency…the exchange currency
D. the trade currency…the base currency
48. What is the expected return of a zero-beta security? ______.
A. Market rate of return
B. Zero-rate of return
C. Risk-free rate of return
D. Negative rate of return
49. Capital asset pricing theory asserts that portfolio returns are best explained by ______.
A. economic factors
B. systematic risk
C. specific risk
D. diversification
50. The______ informs the beneficiary that another bank has issued a credit in his favor without adding its own engagement.
A. advising bank
B. confirming bank
C. drawee bank
D. issuing bank
51. The foreign exchange market is organized as ______.
A. a physical market
B. a capital market
C. a speculative market
D. over-the-counter market
52. If the central bank purchases government securities directly from a commercial bank, bank excess reserves will immediately ______.
A. fall by a multiple of the purchase
B. fall by an amount equal to the purchase
C. rise by a multiple of the purchase
D. rise by an amount equal to the purchase
53. The______ is obligated to pay the beneficiary of an irrevocable unconfirmed letter of credit.
A. account party
B. advising bank
C. confirming bank
D. issuing bank
54. Which of the following is not true? ______.
A. The British Pound is the base currency against all other global currencies
B. In the AUD/USD currency pair, the base and quote currencies are respectively AUD and USD
C. When an investor buys 20 000 EUR/USD, he is said to be buying EUR20 000 and selling the equivalent amount of USD
D. None of the above
55. What is a collection? ______.
A. A form of debt enforcement
B. A method of guaranteeing that exporters get paid
C. An international trade payment method
D. None of the above
56. When a currency pair goes from a low price to a higher price, the quote currency is said to .
A. have strengthened
B. have weakened
C. remain the same value
D. none of the above
57. Which of the following is the collecting bank's responsibility? ______.
A. Examination of the goods
B. Keeping the remitting bank fully advised of what is going on
C. Obeying the importer's instructions
A. All of the above
58. According to the theory of arbitrage, ______.
A. high-beta stocks are consistently overpriced
B. low-beta stocks are consistently overpriced
C. positive alpha investment opportunities will quickly disappear
D. rational investors will pursue arbitrage consistent with their risk tolerance
59. APT differs from the single-factor CAPM because, the APT ______.
A. places more emphasis on market risk
B. minimizes the importance of diversification
C. recognizes multiple unsystematic risk factors
D. recognizes multiple systematic risk factors
60. The primary function of reserve requirements is to serve as ______.
A. a means of disciplining overly aggressive commercial banks
B. a means of reducing bank profits
C. an instrument of monetary control
D. a source of bank liquidity
61. The statement of cash flows is designed to assist users in assessing each of the following, except .
A. the ability of a company to remain solvent
B. the company's profitability
C. the major sources of cash receipts during the period
D. the reasons why net cash flows from operating activities differ from net income
62. Which of the following is a main policy tool of the central bank? ______.
A. Taxation
B. Open market operation
C. The prime rate
D. The money supply
63. Which of the following is not included in the statement of cash flows, or in a supplementary schedule accompanying the statement of cash flows? ______.
A. Disclosure of the amount of cash invested in money market funds during the accounting period
B. A reconciliation of net income to net cash flows from operating activities
C. Disclosure of investing or financing activities that did not involve cash
D. The amount of cash and cash equivalents owned by the business at the end of the accounting period
64. The yield on bank reserves is equal to ______.
A. the discount rate
B. the prime rate
C. a specific rate decided by the central bank
D. 0 percent
65. The feature of APT that offers the greatest potential advantage over the simple CAPM is the .
A. identification of anticipated changes in production, inflation, and term structure of interest rates as key factors explaining the risk-return relationship
B. superior measurement of the risk-free rate of return over historical time periods
C. use of several factors instead of a single market index to explain the risk-return relationship
D. variability of coefficients of sensitivity to the APT factors for a given asset over time
66. In documentary collection, the exporters present the documents to ______ after the goods have been shipped.
A. the remitting bank
B. the collecting bank
C. the reimbursing bank
D. the opening bank
67. If a bank has ______ rate-sensitive liabilities than assets, a ______ in interest rates will reduce bank profits, while a ______ in interest rates will raise bank profits.
A. fewer...rise...decline
B. more... decline... rise
C. more... rise... decline
D. fewer...rise...rise
68. An L/C applicant is unhappy with the goods he receives. He is due to pay a term bill of exchange. Which of the following course of action could take place? ______.
A. He is obliged to pay as the documents were in order
B. He can instruct the issuing bank not to debit him
C. He can pay a reduced amount to compensate for the inferior goods
D. He instructs the issuing bank to return the documents with a payment refusal statement to the beneficiary
69. Which of the following would be considered a Eurodollar? .
A. A U.S. dollar in a bank outside the U.S.
B. A U.S. dollar held as an international reserve asset by a foreign central bank
C. A Federal Reserve note (a dollar bill) in the pocket of a tourist visiting Europe
D. None of the above
70. Which of the following is usually least important as a measure of short-term liquidity? .
A. Quick ratio
B. Current ratio
C. Debt ratio
D. Cash flows from operating activities
71. When the Japanese yen appreciates, then we might expect (everything else equal) that imports in Japan will ______and exports will______.
A.rise...fall
B. rise...rise C.fall...fall
D. fall...rise
72. Which of the following statements is correct? ______.
A. A change in the discount rate usually precedes changes in reserve requirements
B. A change in the discount rate usually confirms policy changes
C. A change in the discount rate usually initiates a change in policy
D. The discount rate usually moves in the opposite direction from other interest rates
73. When borrowers know more than lenders about the future prospects of a project to be undertaken with borrowed funds, the lender faces the problem of______.
A. moral indignation
B. default risk C. free riding
D. asymmetric information
74. If a company's current ratio declined in a year during which its quick ratio improved, which of the following is the most likely explanation? ______.
A. Inventory is declining
B. Inventory is increasing
C. Receivables are being collected more rapidly than in the past
D. Receivables are being collected more slowly than in the past
75. A stock has a beta of 0.5. What does this mean? ______.
A. The stock will fall on average by half as much as the market
B. The stock will fall and rise by twice as much as the market
C. Every time there is a price movement, the stock will rise or fall by half as much as the market
D. The stock price change will on average be half as much as the market price change
76. What does P/E Ratio stand for? .
A. Public Earnings Ratio
B. Premium Earnings Ratio
C. Price Earnings Ratio
D. Private Equity Ratio
77. If the central bank wishes to increase the level of bank reserves temporarily, it should .
A. purchase government securities outright
B. raise reserve requirements
C. buy government securities under a repurchase agreement
D. sell government securities under a reverse repurchase agreement
78. Which of the following business strategies is most likely to increase the net cash flows of a software developer in the short run but to reduce them over a longer term? ______.
A. Develop software that is more costly to create but easier to update and improve
B. Lower the price of existing versions of products as customer demand begins to fall
C. Purchase the building in which the business operates (assume the company currently rents this location)
D. Reduce expenditures for the purpose of developing new products
79. Exchange controls require the government .
A. to ensure that the foreign-exchange market is perfectly competitive
B. to stop buying foreign exchange
C. to sell more foreign exchange than it buys
D. to balance inflows and outflows of foreign exchange at the current exchange rate
80. See the following diagram: Bank A
| |
Assets |
Liabilities |
| Rate-sensitive |
$20 million |
$50 million |
| Fixed-rate |
$80 million |
$50 million | If interest rates rise by 5%, say from 10% to 15%, bank profits (measured using gap analysis) will ______.
A. decline by $0.5 million
B. decline by $2.5 million
C. decline by $1.5 million
D. increase by $1.5 million
81. In documentary collection, the documents will not be delivered to the buyer until ______.
A. the goods have arrived
B. the buyer has cleared the goods
C. the bill is paid or accepted
D. the seller says so
82. In documentary credit operations, all parties concerned deal in ______.
A. credits
B. documents
C. contracts
D. goods
83. A check involves______.
A. the writer, the signer, the cashier, and the bank
B. the drawer, the payee, and the bank
C. the drawer and the payee
D. the signer, the payee, and the company
84. Assume a bank has $200 million of assets with a duration of 2, and $ 100 million of liabilities with a duration of 3. What is the duration gap for the bank? ______.
A.2
B.－1
C.0.5
D.－4
85. When a central bank allows the purchase or sale of domestic currency to have an effect on the monetary base and hence on the money supply, the intervention is said to be a/an _____ foreign exchange intervention.
A. limited
B. unlimited
C. sterilized
D. unsterilized
86. The shipper wants assurance that his goods will reach their destination. The bill of lading gives him this assurance. It thus serves as a ______.
A. contract for delivery
B. receipt for goods
C. title document
D. negotiable instrument
87. A sound policy to combat a temporary liquidity shortage in the banking system would be .
A. an increase in the discount rate
B. an increase in reserve requirements
C. a reduction in reserve requirements
D. the purchase of government securities under repurchase agreement
88. The narrowest definition of money is referred to as ______.
A. M o
B. M 1
C. M 2
D. M 3
89. Which of the following is the term used to describe the offsetting of the effects of intervention in the foreign exchange market on the domestic money supply? .
A. Daily intervention
B. Sterilization C. Discretionary monetary policy
D. Discretionary fiscal policy
90. Under a fixed exchange rate system and freely flowing capital, .
A. fiscal policy is ineffective
B. monetary policy is very effective
C. the supply of money is very important
D. monetary policy is ineffective
91. Cash flows are grouped in the statement of cash flows into the following major categories: .
A. cash receipts, cash disbursements, and noncash activities
B. direct cash flows and indirect cash flows
C. operating activities, investing activities, and collecting activities
D. operating activities, investing activities, and financing activities
92. A company that is losing money will have a P/E ratio of what? ______.
A. Negative P/E
B. Very small P/E
C. It does not have a P/E
D. None of the above
93. Suppose the average level of all prices has doubled over the last ten years. We can come to a conclusion that ______. A. the price of money has dropped by 50 percent
B. the size of the money supply has doubled
C. the value of money has been reduced by one-half
D. the velocity of money has increased by 50 percent
94. A company with a P/E ratio higher than the market or its industry means that ______.
A. earnings are expected to grow at a slower rate than the market
B. earnings are expected to grow at a faster rate than the market
C. it will be a low risk investment
D. none of the above
95. The following rules of debit and credit in accounting are all true except that ______.
A. increases in assets are recorded on the debit side of the account
B. increases in retained surplus dividends are recorded on the debit side of the account
C. decreases in liabilities are recorded by debits D. decreases in expenses are recorded by credits
96. The money supply should be large enough to enable the public to buy, at current prices, all______ over a given period of time.
A. the goods and services the economy has produced
B. the goods, services, and financial assets the economy has produced
C. the goods and services the economy is able to produce
D. the goods, services, and financial assets the economy is able to produce
97. When the U.S. real interest rate is low, owning U.S. assets is ______ and so U.S. net foreign investment is ______.
A. more attractive... high
B. more attractive... low
C. less attractive... high
D. less attractive... low
98. In the open-economy macroeconomic model, the quantity of dollars demanded in foreign-currency exchange market ______.
A. depends on the real exchange rate. The quantity of dollars supplied in foreign-exchange markets depends on the real interest rate
B. depends on the real interest rate. The quantity of dollars supplied in foreign-exchange markets depends on the real exchange rate
C. and the quantity of dollars supplied in the foreign-currency exchange market depend on the real exchange rate
D. and the quantity of dollars supplied in the foreign-currency exchange
99. Assume a bank with the duration gap of －1. A ______ in interest rates will ______ bank's net worth.
A. fall... reduce
B. fall... increase
C. rise. .-.reduce
D. change.. .have no effect on
100. Adverse selection is a problem associated with equity and debt contracts arising from .
A. the lenders' ability to legally require sufficient collateral to cover a 100% loss if the borrower defaults
B. the lenders' relative lack of information about the borrowers' potential returns and risks of his investment activities
C. the borrowers' lack of incentive to seek a loan for highly risky investments
D. none of the above |
