1. What are the expected returns for Stocks X and Y respectively? ______.
) a) a5 F2 b, F" {; u A. 20% and 10%' [1 d4 X H2 Y3 {2 x* Q
B. 18% and 12% u0 J6 \) c9 E2 k% c. X, c. F, i* S
C. 20% and 11%
+ m+ G O0 G1 y( g D. 18% and 5%. j1 ?4 V! ?+ D
2. Which of the following payment terms eliminates the exchange risk, assuming the exporter invoices in foreign currency? ______.
) i5 }' G; F/ H* A$ p: x A. Confirmed irrevocable documentary credit
: [+ w: z: O3 P: l: v B. Open account
. _+ }2 A x2 ^+ {4 P* m1 q C. Documentary collection D/A! d% E$ h9 Z7 Y! d
D. None of the above' Z& d& |. r, @7 Y8 R! k, }+ m
3. ABC Co. Ltd. purchased a car for $ 12 000, making a down payment of $5 000 cash and signing a $7 000 note payable due in 60 days. Which of the following is not correct? ______.. z+ Z8 a" H0 J6 D7 J
A. From the viewpoint of a short-term creditor, this transaction makes the business less solvent" q" G" w- K2 V8 ~. S
B. Total liabilities increased by $7 000' W# b8 @" G/ [% g G, A( g
C. Total assets increased by $12 000
- k: a0 s( n# G0 `. h7 ]: a0 s D. This transaction had no immediate effect on the owner’s equity in the business
& g& H/ g+ r- V9 U: \+ h7 Z 4. Which of the following terms of payment will entirely eliminate country risk? ______.
: u7 f7 ^: T. W/ w0 O: v# h, P# n A. Revocable documentary credits7 W/ \3 F, _+ q T1 R
B. Confirmed Irrevocable documentary credits
/ f8 s1 A4 b0 E6 c2 M; k C. Documentary collection D/P. W1 @/ F. W0 m+ m# ]
D. Documentary collection D/A0 I3 g, k& U. q& z2 Z. a
5. The expiry date of a documentary credit is Sunday, 24 February, and documents have to be A presented to you. Which of the following is an acceptable presentation?______.
. g, F4 T% a; W% C$ q A. Presentation to you on Monday 25 February with the bill of lading dated 25 February1 L7 i- H4 Q8 [! k9 f: M% Z0 D( A
B. Presentation on Monday 25 February with the bill of lading dated Sunday 24 February7 T. _& c: F. L) x
C. Presentation on Tuesday 26 February with the bill of lading dated Sunday 24 February
1 s* W, b2 a% Y D. Presentation on Friday 22 February with the bill of lading dated Sunday 29 January0 }% U' J% d( I/ A. O
6. What are the standard deviations of returns on Stocks X and Y respectively? ______.1 V% S0 [- Z- @6 e" u: x
A. 15% and 26%
7 v) [2 l0 q; M" y& C1 h0 S B. 24% and 13%' v. F/ z0 \( e1 V
C. 20% and 4%" D4 l/ I- C' |
D. 28% and 8%
6 ~& n E: \/ d 7. Who makes the first presentation of documents under a transferable credit? ______.1 m1 _3 U( Y$ u! w1 H2 ~7 H0 l
A. Applicant" @, v6 C }0 Y/ A' ?0 b% l. B
B. First beneficiary
; J5 ]! B% K7 n% y9 g8 }( W C. Second beneficiary
) N0 J# D2 S2 c# [1 W- L D. None of the above
) _* d2 D! G' p 8. A transaction caused a $10 000 decrease in both total assets and total liabilities. This transaction could have been ______.% T: w2 c3 M! y( ~
A. repayment of a $ 10 000 bank loan4 N7 Z' Q+ z5 D! i
B. an asset with a cost of $10000 was destroyed by fire
& a, d' M: ]$ T9 t2 q C. purchase of a delivery truck for $10 000 cash( @9 o9 j: V! i0 ^; V2 E. \5 P
D. collection of a $10 000 account receivable2 E$ p* q$ x7 k' v9 p% U4 \1 \% I
9. Money ceases to serve as an effective store of value when ______.7 ?) f1 B+ w* X, E, O* }' X$ ]# B
A. the government runs large deficits4 G3 E7 Q; z5 }0 R# O% Z8 @$ h
B. the unemployment rate is very high) N2 ^+ N$ e& g. \0 _! a# i
C. productivity in the economy declines
3 d( f$ v+ S4 C D. rapid inflation occurs
: @7 r& w8 l: @ 10. An indication that the money supply is greater than the desirable amount would be .
S$ Z0 q/ |% S$ |# e( }; a A. insufficient spending and excessive saving; X) l4 b0 j8 \, z. s* {+ T
B. deflation2 R$ j8 R0 @: x
C. inadequate spending and rising unemployment# }# D5 z' x* j* X: \& o
D. rising wages and prices |