1. Which of the following is not a function of money? ______. A. To act as a medium of exchange3 @. ?% e j) D
B. To act as a unit of account- _! ~7 h5 Q* H0 o8 G8 y z
C. To act as a store of value
8 E! `! y( X# x% g3 y8 { D. To provide a double coincidence of wants( u: M9 f0 ]6 _! `$ c# a
E. To act as a means of payment7 S5 C6 t8 s( v' m7 k) t
2. The price in the foreign exchange market is called ______.7 K, ^/ N2 ]; m
A. the trade surplus
6 X! C; E+ R L& k/ `; L8 _ B. the exchange rate/ q2 \) G3 `% ?9 G6 _
C. the money price% l4 I2 U F7 y" { q- i
D. the currency rate6 ~) l1 \/ ]9 y1 O i- O: D( \
3. Market risk refers to the risk of______.
( i$ p" K; y! |/ }/ q A. financial prices fluctuations
: Y+ o) W6 o) |+ y7 c B. default
' ?5 g( v" O8 ^ C. fraud
2 ]' I$ M' V0 W- p& R0 }' W" S) K D. deferred payments0 `" M* d) P5 Y4 ]2 y
4. Which of the following is not among the generally accepted accounting principles? ______.( P+ Q( m: R+ W; o# x5 b* j
A. Cash basis! q& k4 I0 `6 d! b N
B. Prudence
) D+ a) \2 \1 n9 h% C5 f C. Consistency1 t' I, K+ d8 E/ c
D. Going concern
# r0 U- [" o5 V- U+ L& W E. Money measurement." S, P8 q: |7 Q
5. What is a documentary letter of credit? ______.
( T7 a% D1 J$ U- w A. A conditional bank undertaking to pay an exporter on production of stipulated documentation
2 j) i) d4 F$ l0 C e* F* r B. A method of lending against documentary security
# Y3 n3 ^$ t) |: O) e: e. B4 C C. An international trade settlement system biased in favour of importers$ c! g8 j) l$ N0 @/ ~
D. All of the above+ J! j Z6 O0 j5 y
6. Holding a group of assets reduces risk as long as the assets ______.% w! i2 y& U/ l# I# w b ?
A. are perfectly correlated
& L+ `" I" _- B9 h# U B. are completely independent
1 p w' r2 W( ?3 B+ @- l6 N C. do not have precisely the same pattern of returns
7 O- D; S0 o' W* ^0 B D. have a correlation coefficient greater than one
5 L2 h0 [2 |' K1 l/ E2 ? 7. An amount, payable in money goods, or service, owed by a business to a creditor, is known as a/an .0 u& n$ f9 K' n4 ^3 ?0 s- K
A. liability
) u9 b5 ]5 g. U5 {% D B. debt; U" g( S' U: ]: C3 P# j
C. equity! {, ]. w$ a2 Y! ^' h( j7 G
D. asset$ L& p" y' L: K
8. What function is money serving when you buy a ticket to a movie? ______.% p8 n; k% s$ M4 c
A. store of value
3 R& T0 j+ u+ e- v2 }! V B. a medium of exchange( V8 V( v- ?7 {. D1 `1 f* Q% z! k
C. transaction demand
" h2 l3 } O. v5 b D. a unit of account
/ F' g- ]5 W8 a) l 9. If foreigners expect that the future price of sterling will be lower, the ______.. n6 n, w" i" b; \
A. supply of sterling will increase, demand for sterling will fall, and the exchange rate will fall" e- C. j& ~3 D6 L1 _
B. supply of sterling will increase, demand for sterling will rise, and the exchange rate may or may not increase
: S7 ]2 x7 @0 @, P/ _0 V! }8 S( G" J C. supply of sterling will fall, demand for sterling will increase, and the exchange rate will rise8 c# a7 w7 a5 }' ?) A, d
D. supply of sterling will fall, demand for sterling will fall, and the exchange rate may or may not fall/ V+ k3 Z O2 C. f' r9 z
10. The documentary collection provides the seller with a greater degree of protection than shipping on ______./ a5 L# ~/ U, y+ ^
A. open account
' L$ u1 v( b, [ a B. bank‘s letter of guarantee, l7 y8 W+ y. ~+ O$ L, A
C. banker‘s draft
! L+ E) |- I+ V- G D. documentary credit
: C# T: O( @% ?. ? 11. Which of the following statements is not true of central banks? ______.
" u3 R" u, K6 v A. They pay the government‘s salaries5 o; p' U3 D8 b$ j' p1 Q
B. They always undertake the regulation of the banking system( K' @8 d, B1 G5 n* s" i
C. They are always the lender of last resort) I& q3 _+ t: `- M/ `
D. None of the above
; K- h" K' }3 p! Z) q% W 12. When GBP/USD rate goes from 1.6150 to 1.8500, we say the dollar ______.
, m& P4 g! u( w A. appreciates by 12.70%4 N; N! D# v2 {! M5 L8 P
B. depreciates by 14.55%+ t% x4 z. O1 o v& R7 c
C. depreciates by 12.70%
% [' Z4 {' i: J/ e( I' b) ?, s7 ? D. appreciates by 14.55%
7 |1 e$ {; n& P+ |3 h, c$ U) | 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? ______.8 A w+ f9 L! T8 Q. R
A. If X and Y are totally independent with each other, the risk of the portfolio is reduced+ A: X. v( a6 l' N3 {4 C* w
B. If X and Y are perfectly negatively correlated, the risk of the portfolio is perfectly offset
2 r) ?* e6 ?6 n$ r4 o! Q C. If X and Y are perfectly positively correlated, the risk of the portfolio is neither reduced nor increased- s7 i; G2 f' _6 `
D. If X and Y are perfectly negatively correlated, the risk of the portfolio is neither reduced nor increased
! p$ P$ u* c0 A. m8 @' n 14. These are four main methods of securing payment in international trade:" v& I, D( H9 y) Z3 M
payment under documentary credit
( }' N7 o4 S+ A! Z open account
/ r/ G: e1 e& ~% w @ collection, that is document against payment or acceptance of a bill of exchange
! f V! N) o2 t0 } payment in advance# a4 J1 O1 Q3 Q' Y- I9 U
From an exporter‘s point of view, the order of preference is ______.+ N! ?( h, ^' n
A. , , ,
+ a, k5 q! \7 `0 n( w2 O B. , , ,
f; P' H; H$ l C. , , ,, c T3 U, A+ H1 z6 Y% |% G
D. , , ,% P! m) Q6 {+ f
15. The main liability on a bank balance sheet is ______.& z) G3 `: n- B# `& Z
A. deposits
0 M' R( I; a, H$ z B. capital and reserves( t# H6 W5 G L2 J* |& R. D6 E
C. loans and overdrafts
: C2 \% q, G- k& t D. cash# ^! Y- e3 P. p- J$ n
16. ______ shows that net income for a specified period of time and how it was calculated.
+ y4 l8 [, ~- Q: i! ` A. The income statement# Q$ o& H* b& `9 c
B. The capital statement
/ n0 c+ ^7 q6 @0 Z. ^/ L- F/ @ C. The accounting statement |