1.Usually the low interest rate currency trades at a ______ to the high interest rate currency in the forward market.
- ^! @2 v' i2 o7 F8 B A.premium
' X5 S& X+ K% }$ u B.par
" t1 ]7 h/ q* J2 ^9 a5 Z8 y C.discount
; q: X$ A$ c7 K: T- g D.bar
3 Y: Y0 }0 i6 W) Y" D8 b0 I" m4 @ 2.Which of the following statements about standby letters of credit is true? ______.
% O; O9 J" M! M- G# s A.They can serve as a guarantee to a buyer against a seller defaulting1 x. \( M) X5 G5 B( N1 h6 K/ s
B.They are contrary to the general rule that letters of credit may only be used for the actual movement of goods. K. O6 L, O$ f8 s
C.They are unlike a tender (or other) bond in their legal standing and method of operation
2 i: z: m1 T) G8 B7 g* \" l ^ D.They are unlike a tender bond with its fixed expiry date' O6 U e$ M" U d9 o3 l5 t4 A
3.The most liquid of all assets is ______." D/ R! j8 m! J \# v# L
A.the stock of commercial banks
+ ?" Z0 K" V+ n6 W- Z4 B8 j% l3 J; u B.M 1
8 G( b2 ^: ?" [# w' v C.intelligence
0 G6 i2 f, d! z& i9 W( W D.the debt of major corporations
2 P: k" w$ `' X5 S# V 4.Beta and standard deviation differ as risk measures in that beta measures ______.
& q6 L. B/ i: ~8 q' \5 S4 I A.only unsystematic risk, while standard deviation measures total risk) L. R' W- Z( |) |, e" ~' J6 X) D
B.only systematic risk, while standard deviation measures total risk/ j: _. |( m% D& R* s
C.both systematic and unsystematic risk, while standard deviation measures only unsystematic risk) B; c! u9 f5 y3 t6 N% y
D.both systematic and unsystematic risk, while standard deviation measures only systematic risk
- {! C- q8 |. N- J, f2 |/ E 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? ______.3 W0 O% s5 P- g7 ]
A.Cash provided by or used in financing activities
. V. Y0 Q. w7 r+ N5 L. X' P) U B.Cash balance at the end of the period9 i2 C7 \: E( S# @6 I- l
C.Total liabilities due to creditors at the end of the period
8 r$ i* V: e+ {/ \9 W7 \9 r6 x. q' W D.Net income1 D. b5 b+ w k
6.An analyst estimates that a stock has the following probabilities of return depending on the state of the economy:
" y7 X1 W4 r& k State of economy Probability Return
& L% ]' Q5 G. r Good 0.1 15%3 k. m: m4 q8 S* ?
Normal 0.6 13%
" Z% [' [! G( r Poor 0.3 7%
* p! n' Q9 M/ t The expected return of the stock is ______.9 T% x4 i: T- R G L+ C: Q
A.7.8%: n4 ?% P/ t. R& g3 l
B.11.4%
1 l4 M* w5 S2 E& T C.11.7%7 O; b" @- q6 T* {- }# f2 N
D.13.0%8 A: x* z6 [4 @, C, z' C
7.According to the rules of debit and credit for balance sheet accounts ______.9 d: Y1 N: D% I8 b; X
A.increases in asset, liability, and owner's equity accounts are recorded by debits
; G: @+ I' d# @: P4 q: g9 v3 O B.decreases in asset and liability accounts are recorded by credits
5 N9 E5 k3 K$ P. _8 } C.increases in asset and owner's equity accounts are recorded by debits2 i4 ]: O `/ q% K; i2 f# Q
D.decreases in liability and owner's equity accounts are recorded by debits 265. q1 C" N) y3 r" H2 ], e
8.Individuals will accept the medium of exchange in return for goods and services only if they are confident that ______.
) k7 U4 i6 C" V1 @, z A.the inflation rate is zero& E- I! j$ O; p. _1 Q) I
B.it possesses intrinsic value: h L4 s1 {; s
C.they can pass it on to others
0 m% S0 D; i5 o# c# Z D.they can exchange it for gold' G2 w' M* q4 i* S
9.When a country's currency appreciates, the country's goods abroad become ______ and foreign goods in that country become ______.4 y! ^- c! p7 [
A.cheaper...more expensive+ S1 `% ~: D' o P" k @
B.more expensive...cheaper
@7 A& s0 E- |3 d1 S C.cheaper...cheaper
8 V0 Z3 I2 y# T( K5 t' z D.more expensive...more expensive$ A; l- j1 _: P. C9 H T- |
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? ______.; n: t, |2 P) b0 a" y `
A.It asks its bank to issue a tender bond which can be converted into a performance bond5 Y. h! r( B7 d
B.It gives up its bid C.It consults its bank about issuing a standby letter of credit, U8 J5 E% d- _0 V# @4 _4 \
D.It asks its bank to issue a performance bond |