金融英语

Simulation Test

Directions: This is a simulation test containing all the arts in the final except for the part of sentence translation. You are supposed to finish this test within 100 minutes. After you complete the test, you may check your answers against the answer key provided at the end of the test.

Part 1: Terminology Translation

Translate the following terms (1 point each, 20 points in total)

1.fiscal agent

2.fiat money

3.medium of exchange

4.ideology

5.fractional backing

6.money laundering

7.International Development Association

8.austerity measures

9.mint parity

10.earnings yield

11.基础货币

12.做市商

13.贴息

14.风险资本投资

15.相对优势

16.国际收支盈余

17.买卖差价

18.可分散风险

19.溢价

20.价值储藏手段

Part 2: Paraphrasing

Paraphrase the underlined parts of the following sentences: (15 points)

1.There are numerous investment systems that have been put forward as a way of

making money in the stock market.

2.Without more liquidity, trade would be curtailed and exchange rates would not be

defended.

3.The currency denomination of the deposit may bear no relation to the country in

which the bank is located or to the residence of the holder.

4.There is a good chance that awful firms are more likely to go bust or get turned

around than other firms.

5.American hegemony was epitomized by the system of Western monetary and

trade agreements emerging in 1944.

6. By obviating the need for individual borrowers or lenders to search out counterparts

themselves, the brokers substantially reduce transaction costs.

7.Brokers attempt to ensure that lenders and borrowers have the facts they need to

strike a fair bargain.

8.The policy banks play an important role in financing key state construction

projects.

9.Consistent with the view that the companies always have been together,

comparative financial statements for periods before a combination that are included in financial reports issued subsequent to the combination are retroactively restated as if the companies always had been combined.

Par 3: Reading Comprehension

Read the following articles carefully and do the tasks that are followed.

Article 1

So far the central bankers have concentrated on stemming panic by flooding financial markets with short-term liquidity, and, in the case of the US Federal Reserve, by loosening the rules for, and price of, banks' borrowing from the discount window.

Common sense suggests the biggest impact of the credit crunch will be felt in America, home both to the subprime mess and the worst financial dislocations. At first sight, the economy hit the August turmoil in fine fettle. Output growth in the second quarter was strong; business spending looked perky; wage growth was solid and high petrol prices were falling.

On closer inspection, however, the picture was less rosy. Output boomed in the second quarter thanks partly to one-off factors, such as the rebuilding of firms' stocks. Consumption growth slowed sharply over the same period, and some areas of consumer spending stayed weak into the summer. Car sales, for instance, fell to a nine-year low in July 2007.

Most important, the economy's weakest link—the housing market—was in even worse shape than many realized. The pace of new-home construction plunged in July

while the backlog of existing unsold houses rose to a 16-year high. House prices have kept falling.

A still-deepening housing bust left the economy vulnerable well before August's crunch. And that crunch has made the prospects for housing much worse. To see why, consider that the mortgage instruments that have disappeared, or become dramatically more expensive, account for more than half of all mortgages originated last year. They include subprime and Alt-A loans for the least creditworthy and “jumbo” loans that are too big to be bought by the government-backed behemoths, Fannie Mae and Freddie Mac.

A simulation by economists at UBS gives a sense of the risks. Their analysis suggests that the combination of a credit shock (which they define as an increase of one percentage point in the cost of capital), coupled with drops of 10% in both share and house prices, would drag America's output growth down by 2.6 percentage points next year, in effect pushing the economy into recession.

The impact on the rest of the world, too, may be severe. Many expect the global economy to be robust enough to shake off American weakness. After all, America's output growth has been soft for more than a year, yet the global economy has remained strong.

Such optimism may underplay the potential channels through which the subprime mess can infect other countries. One route is financial contagion. Subprime losses are popping up from Canada to China. The broad spread of losses makes them easier to digest, but also spreads financial nervousness and risk aversion.

That risk aversion may find surprising victims. In previous financial wobbles, emerging markets often suffered most. This time rich countries, particularly in continental Europe, where some banks have been caught out by the subprime mess, may be more worried. Thanks to fat foreign-exchange reserves and current-account surpluses, many emerging economies are well placed to withstand an exodus of investors.

In Europe's rich economies, in contrast, subprime losses and investor nervousness may force banks to tighten their belts, denting the nascent growth in domestic spending. Germany's Ifo index of business sentiment fell for a third month in August, and consumer confidence has also declined. The European Central Bank, which before the crunch had signaled that it would raise interest rates on September 6th, seems to be waiting to see how the dust settles. This week Jean-Claude Trichet, the ECB's head, stressed that the bank was not “pre-committed” to an increase.

Even if direct financial contagion is contained, America's subprime crisis could spawn psychological contagion, particularly a reassessment of house prices. Although the

scale of reckless lending to risky borrowers was bigger in America than anywhere else, house-price inflation has been more extreme elsewhere. Countries such as Britain and Spain are particularly vulnerable to a house-price bust.

Nor should the world economy's resilience to American weakness be exaggerated. Although America's current-account deficit has been declining, it is still almost 6% of GDP. By spending more than they produce, Americans are still a big source of demand for the rest of the world. A sharp drop in that demand would hurt. To what extent? Well, the economic effects of the credit crunch will become more apparent over time.

1.What does each of the following words mean based on the article? (1 point

each, 7 points in total)

1) a crunch:

2)to plunge:

3) a bust:

4)robust:

5)to underplay:

6)an exodus:

7)to spawn:

2. Answer the following questions:

1)What is the major cause of the American credit crunch implied? (2 points)

2)What was the US economic situation when the August’s subprime mess occurred?

(4 points)

3)What has happened to the American mortgage instruments? (2 points)

4)What are the facts that demonstrate the impact of the crunch on the rest of the

world? (4 points)

3. Translate the following paragraph into Chinese (4 points):

In Europe's rich economies, in contrast, subprime losses and investor nervousness may force banks to tighten their belts, denting the nascent growth in domestic spending. Germany's Ifo index of business sentiment fell for a third month in August, and consumer confidence has also declined. The European Central Bank, which before the crunch had signaled that it would raise interest rates on September 6th, seems to be waiting to see how the dust settles. This week

Jean-Claude Trichet, the ECB's head, stressed that the bank was not “pre-committed” to an increase.

Article 2

Exactly 30 years ago, in August 1977, The Economist published an article by Alan Greenspan, the former chairman of America's Federal Reserve, who was then a private-sector economist. It listed five economic “don'ts”. One of these was: “Don't allow money-supply growth to spiral out of hand.” (1) . The bubble in credit markets that now seems to be bursting and the frothiness of so many asset prices was encouraged by loose monetary policies which pumped liquidity into financial markets.

Many economists blame that excess liquidity on Mr Greenspan himself for keeping interest rates too low for too long when he headed the Fed. (2) . The European Central Bank (ECB) and the Bank of Japan also cut rates to unusually low levels, pushing the average interest rate in the big rich economies to a record low. The real short-term interest rate is now above its long-term average for the first time since 2001, suggesting that global monetary policy is no longer loose. So why did financial markets remain exuberant for so long? One reason is that the world's two most important central banks, the Fed and the ECB, have not been the main sources of global monetary liquidity.

Many economists in investment banks and international institutions mistakenly assume that “global” monetary conditions are set by the central banks of the rich economies. Yet over the past year, a staggering three-fifths of the world's broad money-supply growth has flowed from emerging economies.

Their mints are working overtime. Goldman Sachs reckons that growth in China's M3 measure of broad money has quickened to 20% over the past year. In Russia money supply has grown by a striking 51% and India's is up by 24%. Indeed, the broad money supply in emerging countries has increased by an average of 21% over the past year, almost three times as fast as it has in the developed world. (3) . As a result, the entire world's money supply is growing at its fastest for decades in real terms.

One would expect emerging economies' money supply to outpace that of the rich world, because their GDP growth is faster. (4) . Their interest policy has been timid: over the past three years, as monetary policy has been tightened in America and the euro area, average rates in the emerging world have barely budged. China and India have real interest rates among the world's lowest, even though they have the fastest-growing economies.

The policies of the People's Bank of China (PBOC) or the Bank of Russia are likely to have an increasing impact on developed economies in future as capital controls are reduced and markets become more integrated. This prospect becomes more alarming when one considers that, unlike the Fed and the ECB, most central banks in emerging economies are not independent, and thus free to set interest rates in the best long-term interest of the economy. (5) .

A recent IMF study ranked 163 central banks according to their political autonomy (based on factors such as how officials are appointed, the length of their terms and whether interest rates have to be approved by the government). Emerging central banks have become more independent since the 1980s, but they remain much less so than the EC

B or the Fed. Some of the central banks that have been pumping out the most money, notably those in China, India and Russia, are among the least independent. The PBO

C is under the sway of the Communist Party. (6) . Controversially, the study reckons that both central banks are more independent than the Bank of Japan—another country where its own cheap money policy has created a flood of liquidity outside its borders, through the carry trade.

Choose the following sentences marked A to H to complete the above article. (2 points each, 12 points in total)

A. After the dotcom bubble burst in 2000-01, the Fed slashed short-term interest rates

to 1% by 2003

B. But their surplus money growth over and above the increase in nominal GDP is

also far bigger

C. They no longer control the amount of money sloshing around the world

D. Yet that is exactly what central bankers have done in recent years

E. They are still firmly under the thumb of politicians

F. Adjusted for inflation, their money growth has accelerated alarmingly

G. The Reserve Bank of India would have raised interest rates more aggressively last

year were it not for political pressure

H. This forces central banks to engage in heavy foreign-exchange intervention, which

inflates money supplies

Part 4 Cloze

Fill in the blanks with what you have learned in the textbook. (1 point each, total of 10 points)

The change that has taken place in the financial environment, in the move towards deregulated financial markets, has currency substitution. This has led to the of a proliferation of large numbers of very similar , many of which are very close for money, which makes it more than ever before to define an range of assets

to delimit as “money”. This has hand in hand with the internationalization of the banking and financial in all industrial countries.

Answer Key

Part 1 答案：1. 国库代理，2.不可兑换纸币/法定货币，3. 交换媒介，4. 意识形态，5. 部分黄金支持，6. 洗钱，7. 国际开发协会，8. 紧缩政策，9. 铸币平价，10. 收益率，11. monetary base, 12. market maker, 13. interest subsidy, 14. venture capital investment, 15. comparative advantage, 16. balance of payments surplus, 17. bid-ask spread, 18. diversifiable/unsystematic risk, 19. premium, 20. store of value Part 2 答案：1. many; 2. reduced, 3 have nothing to do with; 4. poor-performing; fail/become bankrupt; be revived; 5. power domination; demonstrated/reflected; 6. making unnecessary; 7. reach/conclude a fair deal; 8. providing funds/loans/credit to;

9. in agreement with; relevant; after; recorded by going back to the stipulated date in the past

Part 3 答案Answers to Article 1

1.What does each of the following words mean based on the article?

1) a crisis

2)to fall or drop sharply

3) a failure

4)strong

5)to minimize the importance of

6) a departure in great numbers

7)to produce or cause

2. Answer the following questions:

1)It is reckless lending to risky borrowers.

2)The US economy seemed to enjoy strong output growth, perky business spending,

solid wage growth and falling petrol prices. However, consumption growth slowed sharply and house prices kept falling.

3)Many of the mortgage instruments, such as subprime and Alt-A loans and

“jumbo” loans, have disappeared or become dramatically more expensive.

4)Subprime losses are popping up from Canada to China. Some banks in continental

Europe have been caught out by the subprime mess. Germany's Ifo index of business sentiment fell for a third month in August, and consumer confidence has also declined.

3.Translate the following paragraph into Chinese:

相比之下，在欧洲富裕的国家，次贷损失和投资者的紧张不安可能会迫使银

行收紧银根，从而减缓初露端倪的国内消费增长。德国的企业信心指数(Ifo)在八月份连续第三个月下滑，消费者信心也已下降。欧洲中央银行在次债危机发生之前曾暗示将在9月6日提高利率，但现在却似乎持观望态度，等待尘埃落定。欧央行行长让-克罗德·特里谢强调，欧央行不会“预先承诺”上调利率。

Answers to Article 2

1 (D)

2 (A)

3 (F)

4 (B)

5 (E)

6 (G)

Part 4 答案

1. international;

2. particular;

3. encourage; emergence; 5. assets; 6. substitutes; 7. difficult; 8. appropriate; 9. gone; 10. sectors