1.Usually the low interest rate currency trades at a ______ to the high interest rate currency in the forward market. }3 r% X9 v9 Q3 [% k
A.premium
) T- T/ [, D& h4 Y* b; [ B.par
0 `9 F4 b5 o% v C.discount
& e) F0 [7 y$ o! ^% ]8 Z D.bar
+ J' n3 q R1 O4 C 2.Which of the following statements about standby letters of credit is true? ______.
& X4 z; |. j5 B( e5 t1 n* H* E A.They can serve as a guarantee to a buyer against a seller defaulting
8 Q4 V" z1 Z$ O# f: c B.They are contrary to the general rule that letters of credit may only be used for the actual movement of goods. `- K& |0 C- ?
C.They are unlike a tender (or other) bond in their legal standing and method of operation' k2 y& @% k9 S& Y7 o
D.They are unlike a tender bond with its fixed expiry date" B3 n! Y( P! o, v
3.The most liquid of all assets is ______.
- n' I9 h6 v6 c/ t# k; R7 g8 Z A.the stock of commercial banks
6 r& P/ V' ^- R r) G B.M 13 r4 i2 j6 h4 E' _3 n
C.intelligence: Q* ~- H0 N. h; K' v1 | n( e
D.the debt of major corporations
* ]/ u- ]+ m3 Y& ^' z2 B 4.Beta and standard deviation differ as risk measures in that beta measures ______. t0 @) l; f; s9 [( b
A.only unsystematic risk, while standard deviation measures total risk
, ]: B/ f9 v$ k8 {- `' @ B.only systematic risk, while standard deviation measures total risk
+ e0 y) e, O* M9 h, h! Z C.both systematic and unsystematic risk, while standard deviation measures only unsystematic risk
5 ]$ s" q- d$ a0 M [ D.both systematic and unsystematic risk, while standard deviation measures only systematic risk
/ ~- f; [& b8 K- G, I 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? ______.
) T6 A; J3 m* s# E, j' h A.Cash provided by or used in financing activities
1 g& u+ O8 y4 n/ o B.Cash balance at the end of the period) \. Y# z1 R1 i! g
C.Total liabilities due to creditors at the end of the period
* G1 k% E" W+ S( T& M D.Net income) N) b' F' c, `! P
6.An analyst estimates that a stock has the following probabilities of return depending on the state of the economy:
" v7 O% z1 q7 D7 K State of economy Probability Return
6 D/ I0 J( v2 Z; }5 v# o' F9 F W Good 0.1 15%1 F) }, W/ ?8 L8 `0 P- Q2 F/ P7 S: u% }
Normal 0.6 13%
5 e; L0 g) X. B Poor 0.3 7%
I8 s$ v' A. x1 w The expected return of the stock is ______.
: e# D& s9 w/ q. e% ]" H A.7.8%
$ X! ^6 \& ^1 B& M' ~, q$ \ B.11.4%
3 t+ Q$ a3 N9 U* M* S; |+ r) K# { C.11.7%
7 G4 j5 \7 \5 c! v/ N- h5 C. o% c D.13.0%
6 q0 C* o6 V) q6 G 7.According to the rules of debit and credit for balance sheet accounts ______.
2 n; l: a7 v$ j$ Q A.increases in asset, liability, and owner's equity accounts are recorded by debits& t e1 E' m' r
B.decreases in asset and liability accounts are recorded by credits1 E3 @0 C# l1 z" P) q
C.increases in asset and owner's equity accounts are recorded by debits
. _- T8 ]% V+ P5 P D.decreases in liability and owner's equity accounts are recorded by debits 265, A% k/ | }: O- R+ T
8.Individuals will accept the medium of exchange in return for goods and services only if they are confident that ______.
2 k% ^7 S* k6 t7 ?7 E" }% H+ m" b. [ A.the inflation rate is zero8 ]; g: E* L+ f5 q+ T
B.it possesses intrinsic value
% M7 [1 L9 U# R4 C2 N2 R7 L C.they can pass it on to others
4 |0 _6 B4 R( V/ ^ f$ o D.they can exchange it for gold5 d9 U% j5 e6 o; Y
9.When a country's currency appreciates, the country's goods abroad become ______ and foreign goods in that country become ______.
) t+ k2 r. F o2 A6 D A.cheaper...more expensive
/ A8 T: E8 u8 N3 N6 P( }$ P B.more expensive...cheaper% W: J1 a4 Y- w" R
C.cheaper...cheaper6 i) N/ t: I, m! ]* o# B
D.more expensive...more expensive
+ I+ y* t% s6 Y% d 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? ______.
. |5 p& Z: R. v; I, o5 _ A.It asks its bank to issue a tender bond which can be converted into a performance bond1 J0 ?/ h m6 s% h6 T1 O
B.It gives up its bid C.It consults its bank about issuing a standby letter of credit
$ T/ K; g' f) H7 I D.It asks its bank to issue a performance bond |