1. What are the expected returns for Stocks X and Y respectively? ______.6 d0 m( p4 `6 v% x6 _, \$ K' Z
A. 20% and 10%1 U) O7 L' u/ H0 B; q# [+ G
B. 18% and 12%3 M% K/ M% P: o1 S; _2 g" @! j3 R5 R
C. 20% and 11%) M6 D$ @4 |+ G! U% {3 l$ r
D. 18% and 5%
( F, t5 k& w0 Q: d; } 2. Which of the following payment terms eliminates the exchange risk, assuming the exporter invoices in foreign currency? ______.
?" o& ^2 @6 i9 J0 |3 q2 h! n5 u0 c A. Confirmed irrevocable documentary credit4 z7 \4 F9 {- s u& z4 Q
B. Open account
5 y1 r9 g6 |7 E- Z, ^! b+ X1 _ C. Documentary collection D/A
. u# B4 Z, w# N D. None of the above
; C$ H/ f4 H/ C% R 3. ABC Co. Ltd. purchased a car for $ 12 000, making a down payment of $5 000 cash and signing a $7 000 note payable due in 60 days. Which of the following is not correct? ______.' |8 b' B5 K, A$ k
A. From the viewpoint of a short-term creditor, this transaction makes the business less solvent
. p7 T. j1 X/ u$ D B. Total liabilities increased by $7 0002 W7 Q* N" c8 T$ D' `
C. Total assets increased by $12 000
: }! O2 b$ @+ u: ` D. This transaction had no immediate effect on the owner’s equity in the business
% d' Z) ?0 B* {' E! y" L8 i 4. Which of the following terms of payment will entirely eliminate country risk? ______.& }7 k" I3 j8 e; ~
A. Revocable documentary credits
" J* j; E: e4 v( Z5 @ B. Confirmed Irrevocable documentary credits
" Y, T. i, G, b# x C. Documentary collection D/P
. w, b9 j% g* B. C- z8 S! g D. Documentary collection D/A
8 [* ?6 o5 F& @" M/ a" V 5. 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; L" A5 S o A. Presentation to you on Monday 25 February with the bill of lading dated 25 February
$ D- S8 j. B$ r: O: [ B. Presentation on Monday 25 February with the bill of lading dated Sunday 24 February2 [+ ~$ A. ]6 s0 c- W# `
C. Presentation on Tuesday 26 February with the bill of lading dated Sunday 24 February, u- Q! e; S9 w% s* c$ c
D. Presentation on Friday 22 February with the bill of lading dated Sunday 29 January
2 Z! X8 r9 i. Y' p# Y! { 6. What are the standard deviations of returns on Stocks X and Y respectively? ______.6 }" C5 Q# Q& x- Z
A. 15% and 26%
5 K* p* M& P$ _; h' X B. 24% and 13%
# v* i# v( K/ @) ]8 M7 I C. 20% and 4%; F0 p1 J- o8 D: v) H* c9 k
D. 28% and 8%8 r9 T0 c- E/ ?* ?( N$ A
7. Who makes the first presentation of documents under a transferable credit? ______.
+ w6 p/ N- F& j! c5 u A. Applicant
- L# p+ o1 u. B" S& B2 p) ? B. First beneficiary
9 Q& u0 N& j% T% X% D C. Second beneficiary& G+ D( W, H$ \5 {" _! r
D. None of the above
; Q5 r3 a0 l& L$ N1 d: |* h- D 8. A transaction caused a $10 000 decrease in both total assets and total liabilities. This transaction could have been ______.# i" b9 C* b1 J; D! c
A. repayment of a $ 10 000 bank loan( s" O9 U9 n9 M! E6 ?0 z" `6 j
B. an asset with a cost of $10000 was destroyed by fire
. Z6 W- z' a& Z1 J" {: H# W2 H. B C. purchase of a delivery truck for $10 000 cash* _. U, W6 {: h% V Q
D. collection of a $10 000 account receivable
% v0 R+ h! {2 W6 c+ y 9. Money ceases to serve as an effective store of value when ______.0 {+ C8 c j9 n* V$ h4 c+ T* h
A. the government runs large deficits
9 {; ]/ r, Z7 h h6 t B. the unemployment rate is very high
+ B* J$ A' f- o2 l* {- y C. productivity in the economy declines
0 W, \# R' @. e D. rapid inflation occurs
% E# v) \+ x I6 @, N h 10. An indication that the money supply is greater than the desirable amount would be .* b7 \+ P8 C/ Z9 R0 P
A. insufficient spending and excessive saving0 w. l) L8 L8 f: z7 L
B. deflation7 y8 W$ B L: J6 G8 Y. \3 I, m& b0 N
C. inadequate spending and rising unemployment
: x7 p, ?8 ~! _. G D. rising wages and prices |