. Which of the following is not a function of money? ______.
$ @7 Z8 @* t" X, Z' F! @" E* h8 eA. To act as a medium of exchange
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B. To act as a unit of account
( B6 I; F z' S8 x; e) I+ CC. To act as a store of value
; J% G$ G2 a7 F. T4 C Z+ dD. To provide a double coincidence of wants 5 t7 v% D c: `; I5 S: b
E. To act as a means of payment / }* ^9 @7 ?; m$ T' f6 s
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2. The price in the foreign exchange market is called ______. ; v7 J4 ^1 U, p/ E- z, U7 @
$ {& |4 @0 W8 H8 a' ~, \( zA. the trade surplus ) N5 E; M) G1 X3 ~
B. the exchange rate
; W# g- x9 o( W4 }1 C6 V* o! x) C" BC. the money price 7 ^; |- W D% B) b) t3 ` E6 m
D. the currency rate
* g. |. Y: D! l+ ]1 p6 m' K3. Market risk refers to the risk of______.
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( Z7 J, E3 L% xA. financial prices fluctuations
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B. default
# W c0 }* D( ^7 e/ l$ O g$ KC. fraud
0 z8 y e" F0 [! xD. deferred payments 7 y- L# x4 ~7 F
% R' O5 k; G2 ^2 S, B( U3 L$ e4. Which of the following is not among the generally accepted accounting principles? ______. , B# S0 G5 V7 Z; R
1 K2 a" V Y, _% u. `9 JA. Cash basis . h' u6 U5 {! b5 k7 m! c: {
B. Prudence
* |6 x! j7 [9 WC. Consistency
& Q0 @9 o5 _& [$ C' oD. Going concern
( l# S2 w% R9 h/ E* i" L8 nE. Money measurement.
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e( z2 O' ^& @5. What is a documentary letter of credit? ______.
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1 O' [# m0 k9 I* A. k% qA. A conditional bank undertaking to pay an exporter on production of stipulated documentation
5 D2 t1 R' @9 o! [B. A method of lending against documentary security
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. W7 p* e. f) ~; h3 z$ ?8 [C. An international trade settlement system biased in favour of importers 8 R; S B) Y7 d, {3 y
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D. All of the above
" F. F0 C( y( [' f6 p6. Holding a group of assets reduces risk as long as the assets ______. t7 L0 y- Y" v/ m& d6 {4 i9 L( Q
A. are perfectly correlated . D: P, t1 u O9 s: U8 ^
B. are completely independent
# T+ G( Y) U! j( D. OC. do not have precisely the same pattern of returns
5 V; D2 f0 O4 Q9 l. f6 gD. have a correlation coefficient greater than one
( T- v3 W+ ?# c2 s* S' Y5 b7. An amount, payable in money goods, or service, owed by a business to a creditor, is known as a/an . 4 x) W7 B8 ~8 O
A. liability " c6 \ }& P$ F8 C
B. debt & p0 `3 Y6 I- ^( R1 Q+ \$ U% d. s
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C. equity : z) R6 y7 }; u/ ~
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2 S8 l2 e' J2 H+ s x6 ~. z* [D. asset
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) M9 E4 B5 B, p2 Q b8. What function is money serving when you buy a ticket to a movie? ______.
$ h% ?* P! j, P3 zA. store of value
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( g( I4 N+ S& ?/ PB. a medium of exchange 0 s/ {# F9 P9 c' i6 ?
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C. transaction demand . G& q0 W7 s2 `7 Q) {6 L
D. a unit of account
' \; F) ~ N& a6 `0 k' i9. If foreigners expect that the future price of sterling will be lower, the ______.
/ ~6 [: Z, x1 `: xA. supply of sterling will increase, demand for sterling will fall, and the
* R( r% x4 E% k1 kexchange rate will fall " x$ y. h+ s" N: y5 A) e$ }
# K! I$ B: l. G0 PB. supply of sterling will increase, demand for sterling will rise, and the
# r; G% `6 r$ D* e$ ? ]4 t0 [; a
9 [( x, Z9 z2 P- H& Sexchange rate may or may not increase
V- `+ t& \' y. ~9 R: gC. supply of sterling will fall, demand for sterling will increase, and the exchange rate will rise
. E# V) y- y/ c( l: D5 zD. supply of sterling will fall, demand for sterling will fall, and the exchange rate may or may not fall
6 U9 s/ {* g6 a10. The documentary collection provides the seller with a greater degree of protection than shipping on ______. , T5 ~: h& d- z0 D# M* n9 K
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A. open account : a" U+ Z$ s7 ]" ]) y, |. e* Q4 D0 w
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B. bank‘s letter of guarantee 4 ~8 T6 x9 W1 z/ F; _) e
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C. banker‘s draft
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D. documentary credit & N3 v/ w5 D/ z* `
11. Which of the following statements is not true of central banks? ______. & r6 x4 Q# `( a6 _7 N
A. They pay the government‘s salaries
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. p3 b! A. S! n) @7 qB. They always undertake the regulation of the banking system
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C. They are always the lender of last resort
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D. None of the above
# M w- u9 y7 ]" h" u6 |! N: L: o12. When GBP/USD rate goes from 1.6150 to 1.8500, we say the dollar ______.
& y9 z q1 e* p# O% B2 ]A. appreciates by 12.70% % y* h& x% z4 }% t4 ~; `: r
B. depreciates by 14.55%
1 n" K( l* o) u. j% BC. depreciates by 12.70%
& P. D! J, e) mD. appreciates by 14.55% 4 w' M/ j/ ^% r6 l [
13. According to diversification principle in investment, suppose you invest Stock X and Stock Y with equal funds, which of the following is not true? ______
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A. If X and Y are totally independent with each other, the risk of the portfolio is reduced 2 j) z, f9 D H O
B. If X and Y are perfectly negatively correlated, the risk of the portfolio is perfectly offset
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0 n0 ~7 W, ^, [# NC. If X and Y are perfectly positively correlated, the risk of the portfolio is neither reduced nor increased
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D. If X and Y are perfectly negatively correlated, the risk of the portfolio is neither reduced nor increased
1 w$ F& e b1 Q, C! @3 J S* H) S14. These are four main methods of securing payment in international trade:
3 b7 ~( K% i" @/ V$ M9 g6 y& y1 T+ epayment under documentary credit $ i3 N$ _/ K- t
open account , h# ?$ _" v9 [, W- r2 r
collection, that is document against payment or acceptance of a bill of exchange
0 A6 G5 t. z* hpayment in advance
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From an exporter‘s point of view, the order of preference is ______.
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A. , , , 0 {: J- G) [3 k
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B. , , , % m; W6 _/ o" e, A0 i5 V& s
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C. , , , : w7 F7 J0 j( S9 i9 L4 ]" J! G& M: k
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D. , , , + O* @, N( L4 v+ a
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; D4 p# L8 W$ p& z! Q15. The main liability on a bank balance sheet is ______.
7 I' c: m# L1 ?0 ^) Z* uA. deposits , H6 L+ s) x3 v4 b1 x
B. capital and reserves ) T' Q% W( [# p7 C2 g
C. loans and overdrafts
5 p' d, `; X, G, W4 a# o6 B# @D. cash . X+ e& Y% m. Q* N; o
16. ______ shows that net income for a specified period of time and how it was calculated. m5 `! k7 ~% H, g+ x% b
A. The income statement 7 R* N7 h ^! e+ \9 ^0 |/ n( R
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B. The capital statement |