1. Under which one of the following circumstances would it be wise for your customer to arrange a forward foreign exchange contract? ______.5 W8 X3 q( r3 f/ ~2 h. _
A. Import of goods priced in a foreign currency* s, a2 \8 w& D! R9 w3 d7 \
B. Import of goods priced in RMB
P( Y8 ^2 C! j8 `5 p( b' D C. Export of goods priced in RMB, F. o4 Y$ ~/ P8 W2 e1 v% q
D. Export of goods priced in a foreign currency where the rate of exchange has been agreed in the sales contract3 v, {: w% ~6 G
2. Incoterms address ______./ L9 I6 E! k7 `! C( {$ i/ f
A. the risks of loss between the parties, d2 |+ \7 T' I
B. breaches of contract
C6 [$ X% i+ R, Z' g% I" Q. O3 k C. ownership rights
) ?+ [8 p4 Y: x! S: O D. type of ship used! ~8 ^ `1 c. Y$ m
3. Which of the following is or was an example of representative full-bodied money? ______.4 n0 Y7 @- p# r4 J3 H5 y+ g5 V
A. Debt money7 S; I4 A) P: w2 t
B. ATS account8 }# Z; I5 Q. M6 d; c! A/ |
C. Gold certificate
3 T5 h1 M# j# V8 N; A$ a- L D. Demand deposit2 X( B+ n% R2 g; S& n7 k6 }
4. Risks associated with investing in foreign countries are the following except ______. h# }6 @8 B7 {/ M( Z$ b6 a
A. voting risk" u5 E5 s5 t( }* Q, ]9 l
B. exchange rate risk
# L) R1 B# b* y( v4 n C. country risk
- w ~5 {: s5 t0 C' g5 b D. political risk
, y: Z. k$ |( m0 r4 p+ @+ d 5. An exporter sells goods to a customer abroad on FOB and on CIF term. Who is responsible for the freight charges in each? ______.9 E" b) r0 C& i1 V3 [$ y. h
A. Exporter; Exporter
/ K* |5 u/ C( J, t) d2 j( b3 _ B. Exporter; Importer( Q& y) v# y) g
C. Importer; Importer4 k5 L- t: A3 T7 U7 R' p# V3 Y
D. Importer; Exporter" L! g) ~; K: i9 X9 f8 G7 J) G3 N
6. Default risk refers to the possibility that a borrower may ______.' W) `: T- w. M- r) L# q
A. be unable to repay the principal on his loan$ z6 U# W' B0 \6 K* A/ u
B. be unable to make the interest payments on his loan i/ f- M% K& o2 \' C+ T6 ~; V
C. go bankrupt
% f. r" A P7 A: q/ _1 D! P" y D. all of the above% t0 e- Z% N( C) u% m
7. What is the reserve requirement? ______., J+ D3 M% `+ ?' S
A. The requirement of a bank to deposit a percentage of money- W# X+ V* @8 R, v" ^3 M/ ?
B. The requirement for deposits in cash
9 J5 A0 h& T2 B C. The percentage of a bank's deposits in the form of cash reserves
7 e0 E4 i, B# `8 t! Q; q D. The requirement for cash reserves
+ |. n* [# s3 _, H9 N* h& V 8. A draft is like a check that can be endorsed but it isn't a title to goods, like ______.% x- F N; v: l- N% f
A. a bill of lading
: J& _0 b: ~# R1 o/ `+ v" L B. an inspection certificate R6 G" {, t4 D8 h& X+ |) e
C. a certificate of origin
+ _) N! q' }: X% e3 P: Q# U2 _ D. an insurance certificate
- a& v- p0 W4 ~3 Z1 I1 X0 ]+ | 9. Arbitrage ______.
) r( r7 j8 {6 U A. is a general economic term for buying something where it is cheap and selling it where it is dear0 b) l+ s" F$ L B7 t; Y& r
B. keeps exchange rates consistent across markets$ S3 ^- ]# P1 u
C. has been outlawed by the International Monetary Fund+ o4 S4 P( v# k& D4 N$ k8 `. j
D. cannot occur where there is a forward exchange market& x* n4 M9 F! ?& _, w
E. both A and B
* G- U; F; `5 T 10. What is the purpose of comparing the ledger entries with the documents? ______.5 x1 a& F% p; k0 p# d* {5 D7 Z
A. To prove that all the transactions have made for the right amounts
7 V5 s; G/ k9 c. s) H" O& ? B. To prove that all the accounts have been posted correctly
- {( n, S" i# L7 ]: t' H( o C. To check the number of all the debits and credits
$ F. \( `& O1 q; k% a# t' v D. To post the right accounts |