金融英语初级模拟试题

金融英语初级模拟试题
金融英语初级模拟试题

金融英语初级模拟试题

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%

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,and owner’s equity accounts are recorded by debits

B.decreases in asset and liability accounts are recorded by credits

C.increases i n 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 counter trade? ______.

A.Counter purchase

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 equities0.6$50 OOP

0.4-$30000

Invest in risk-free T-bill1.0$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 owne r’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 por tfolio’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.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 ban k’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 curr ency

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

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