金融英语习题

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 defaul

2、ting 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

4、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 risk5. What information would you find in a statement of cash flows that you would not be able to

5、get 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 ret

6、urn 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，

7、and 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 medi

8、um 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 g

9、oods 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

11、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 Receivab

12、le 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-excha

13、nge 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 wishin

14、g 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

15、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 boomsD. inflation and the unemployment rate 19. In a f

16、ixed 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 custom

17、er1. 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. Ope

18、n 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 mak

19、es 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 Mond

21、ay 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 Sun

22、day 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 accou

24、nt 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 do

26、uble 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 pa

27、yments 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

28、documentation 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 prec

29、isely 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. s

30、tore 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， dem

31、and 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 co

32、llection 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 t

33、he 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 diversificati

34、on 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 perfe

35、ctly 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. cap

36、ital 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 b

37、e 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 ha

38、ve 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 m

39、ay 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 securi

42、ty 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 b

43、uyer， 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

44、covers 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 velo

45、city 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 ra

47、te 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 parties to a life policy in addition to the issuing company： the insurer

48、， the life assured and the beneficiary.44. A guarantee is an agreement that may be evidenced in writing or in oral form.45. An insurable interest is assumed where people take life assurance on their own lives or where the relationship is that of husband and wife. 46. Profit does not equal cash and s

49、ome profitable businesses have failed for want of cash.47. Bills are negotiated with recourse to customers in the event of nonpayment.48. A firms gearing is the level of fixed assets as a percentage of total assets.49. A bank must obtain a judgment if it wishes to pursue its legal remedies against a

50、 debtor. 50. When a country borrows from abroad， its balance of international payments shows an outflow of foreign exchange.1. Under which one of the following circumstances would it be wise for your customer to arrange a forward foreign exchange contract？ _.A. Import of goods priced in a foreign cu

51、rrencyB. Import of goods priced in RMBC. Export of goods priced in RMBD. Export of goods priced in a foreign currency where the rate of exchange has been agreed in the sales contract2. Incoterms address _.A. the risks of loss between the parties B. breaches of contractC. ownership rights D. type of

52、ship used3. Which of the following is or was an example of representative fullbodied money？ _.A. Debt money B. ATS accountC. Gold certificate D. Demand deposit4. Risks associated with investing in foreign countries are the following except _.A. voting risk B. exchange rate riskC. country risk D. pol

53、itical risk5. An exporter sells goods to a customer abroad on FOB and on CIF term. Who is responsible for the freight charges in each？ _.A. Exporter; Exporter B. Exporter; ImporterC. Importer; Importer D. Importer; Exporter 6. Default risk refers to the possibility that a borrower may _.A. be unable

54、 to repay the principal on his loanB. be unable to make the interest payments on his loanC. go bankrupt D. all of the above7. What is the reserve requirement？ _.A. The requirement of a bank to deposit a percentage of moneyB. The requirement for deposits in cashC. The percentage of a banks deposits i

55、n the form of cash reservesD. The requirement for cash reserves8. A draft is like a check that can be endorsed but it isnt a title to goods， like _.A. a bill of lading B. an inspection certificateC. a certificate of origin D. an insurance certificate 9. Arbitrage _.A. is a general economic term for buying something where it is cheap and selling it where it is dearB. keeps exchange rates consistent across marketsC. has been outlawed by the International Monetary FundD. cannot occur where there is a forward exchange marketE. both A and B10. What is the purpose of comparing the ledger e