SECTION ONE (Compulsory) :Single-choice questions. , w! |; |4 q" n4 `! h; c
from the following four options, select a correct and fill in its labeling the brackets. (A total of 10 points) " q2 ]/ {: j: Y
1)Which of the following will NOT cause a shift in the demand for baseballs? ( )
5 {/ R! c5 z+ C6 B A. Very good weather. 5 W# ^# ], r. }. |6 y8 ~- x+ H& ? j
B. A decrease in the price of baseball hats. $ K" R( N. e" b7 s
C. The consumers’ expectations.
2 S+ ~1 Y& x. j4 R0 N D. An increase in the price of baseballs. , F4 K+ ?9 I, E/ e( O! N
2)Decreasing returns to scale may arise from ( ) . K- F* K d, `) d* i" u
A. Specialization of inputs. 2 n# y* b$ n3 K: v; Z; l
B. Duplication of plant and equipment at equal cost. 9 {) H: ?4 l5 t! C, S! [# H( N
C. Inefficiencies in management.
1 l6 Q; `* g/ s% w3 a- m D. Using inputs in unequal proportions.
+ O" Y0 w0 D# w/ j. t 3)If the marginal rate of technological substitution (MRTS) is more than the price ratio of labor over capital (w/r), then to minimize cost the firm should ___ the input of capital and ___ the input of labor.
- x- }$ P1 h& T' g4 W6 Q) B8 } A. Increase, decrease
8 {- }6 ^# ?6 c) Z# Z0 b( v. Z B. Decrease, increase ( A. n' R3 s {8 x( }! K8 N. \
C. Decrease, decrease
6 M, u% g _! J6 w( C' x4 b D. Increase, increase 5 [: Y' ~9 e: w& g' V4 I$ W; X
4)The price of a good changes, both the substitution effect and the income effect reinforce each other, then the good is a (n) ( ) - g; c8 C9 w. F8 ~
A. Normal good. 2 B4 t5 t2 q% H6 v6 G7 t- J) o
B. Inferior good. 5 U1 ]7 L, z' r( p4 g. F* r
C. Giffen good. $ J( t# @3 S# e* F q
D. None of the above
) D* n8 k% k0 K# i( l+ i* Z+ C 5) What market is the Most in need of the advertising? ( ) ' m7 e$ ~- q+ m& J' R
A. Fully competitive market ' i# N5 _' o0 P% N* {* [. `5 V8 h
B. Monopolize market
- a( O% d5 L& d* s3 Q C. Competitive monopoly market , Y2 Q& V' _1 r6 a3 |
D. Oligopoly market
1 c) u( G5 H0 w! H$ Q3 L 6) American economist Modigliani’s life-cycle hypothesis is that: ( )
c- W) Q% ?. u- _ A. based on the current income to make consumer decisions
) q0 m/ J' j0 F3 p/ Q9 E B. Work time after retirement savings for the consumer finance
2 [7 P! e& N. K4 g C. based on income to make the lasting consuming decision-making
; ^9 K0 C* d2 S, d D. revenue in the consumer durable basis for decision-making to the impact of temporary revenue estimates into account ' w' |" d$ w2 A& ]
7)According to the rules of debit and credit for balance sheet accounts: ( ) " C% @ I& I$ [ w; e0 \
A. Increases in asset, liability, and owner’s equity accounts are recorded by debits
9 t. W9 {' x8 `" U: S4 Y* \1 Y# R# r& f3 P B. Decreases in asset and liability accounts are recorded by credits $ {: F; U* B: E7 y- \4 \
C. Increases in asset and owner’s equity accounts are recorded by debits
' s6 c* ]9 g7 p( ? D. Decreases in liability and owner’s equity accounts are recorded by debits 265
) V& i2 |4 `% z 8)Individuals will accept the medium of exchange in return for goods and services only if they are confident that: ( ) , k# J: p8 Y% h, i1 s
A. The inflation rate is zero
0 a3 |8 M, h4 n" O B. It possesses intrinsic value * i/ Z' A5 N i# g3 R e2 H- H, L
C. They can pass it on to others : m4 g2 B. _$ W# _1 a# D9 d) B! `8 _
D. They can exchange it for gold - A" c8 q; J" P
9)The prices of meat products in a competitive market are determined by: ( ) ' ?# T. m$ ]/ m. n5 @- \
A. Government.
- d: C6 |/ h& j3 E B. Business monopolies. % `- b0 B' b5 d7 O A
C. Supply and demand.
) B, J/ ~2 K: I D. The Consumer Price Index.
' e. B# j- c+ d5 \" h 10)Which one of the following is most likely to improve the wages of American workers? ( )
1 x9 a6 y& }0 ~" J j A. An increase in business inventories.
& d: x6 R# P& @' [/ K' A B. An increase in productivity. : Y+ e5 B9 }( W) `: x
C. An increase in interest rates.
$ S& C5 _$ z$ z; b5 S SECTION TWO(Compulsory): Reading Comprehension (10 points)
7 g w! v4 v* H$ w Monica Lewis, CFA, has been hired to review data on a series of forward contracts for a major client. The client has asked for an analysis of a contract with each of the following characteristics: * V1 e0 U9 q% @. Q
A forward contract on a U.S. Treasury bond ! ?: ]! T3 t7 ^8 h; p6 y; F
A forward rate agreement (FRA) ! i" u8 M1 U6 x& o8 O4 E" R
A forward contract on a currency . ^: j) ~: P: B1 r2 o, u- q
Information related to a forward contract on a U.S. Treasury bond: The Treasury bond carries a 6 percent coupon and has a current spot price of $1,071.77 (including accrued interest). A coupon has just been paid and the next coupon is expected in 183 days. The annual risk-free rate is 5 percent. The forward contract will mature in 195 days.
) J- }! u n+ @' i# E( p Information related to a forward rate agreement: The relevant contract is a 3 x 9 FRA. The current annualized 90-day money market rate is 3.5 percent and the 270-day rate is 4.5 percent. Based on the best available forecast, the 180-day rate at the expiration of the contract is expected to be 4.2 percent. # M- U; p+ p m7 c5 r
Information related to a forward contract on a currency: The risk-free rate in the U.S. is 5 percent and 4 percent in Switzerland. The current spot exchange rate is $0.8611 per Swiss France (SFr). The forward contract will mature in 200 days. |