1. Which of the following is not a function of money? ______.
1 y# W5 ?8 X" }+ n9 @' G/ s A. To act as a medium of exchange
/ }% F* g5 a7 ] z) j0 o" t B. To act as a unit of account
7 j& a% t& x; Q$ @) Y/ A" t- n C. To act as a store of value& y( C6 |% S5 w( ]- k
D. To provide a double coincidence of wants
/ N1 C- z' ]7 g$ L E. To act as a means of payment
* G( U# s" s" Q6 m* @! N1 f 2. The price in the foreign exchange market is called ______." ~/ `3 @2 r, P+ C- \
A. the trade surplus2 A8 R5 O. V3 U P9 p$ [* d5 h
B. the exchange rate [* `/ j/ g7 L7 D) ?/ H
C. the money price: Z D& J7 L* O! h
D. the currency rate6 r9 M/ Y$ q% i, y/ m
3. Market risk refers to the risk of______.( Q- D6 B8 i7 ? }2 w
A. financial prices fluctuations* E1 c2 \) ?" L# B a
B. default
M; |3 d8 C; d C. fraud
. ]& {7 a6 T: T D. deferred payments
, h C2 i( ?0 V 4. Which of the following is not among the generally accepted accounting principles? ______. C; j2 z# X' h9 g5 i9 }3 O
A. Cash basis
3 L& Q* w- B7 `9 e B. Prudence
) U% {0 u! ~5 c' c+ b5 v C. Consistency6 ^8 b/ d8 A: C7 l9 U) L
D. Going concern' O( P% r/ b( E7 X9 {1 }4 W. c
E. Money measurement.
# v2 q3 V# T9 T) r 5. What is a documentary letter of credit? ______.
. H7 k! K% m, J7 w A. A conditional bank undertaking to pay an exporter on production of stipulated documentation
0 r6 k( S) h! r6 P) B8 k B. A method of lending against documentary security7 d: n8 ]+ C: i3 ]7 a9 t7 G
C. An international trade settlement system biased in favour of importers
4 d4 ?9 A, [# D5 o D. All of the above* i8 A# x5 k. x% _* w Q
6. Holding a group of assets reduces risk as long as the assets ______.
% k" y* q3 u/ n% N. K A. are perfectly correlated
2 s( v1 J, }2 \8 j- d, \: W B. are completely independent4 ^# B$ _3 A# S& u4 G/ C
C. do not have precisely the same pattern of returns
" r4 f. v/ d Z% ]( o5 e D. have a correlation coefficient greater than one
5 c' ]9 `0 `) e4 e! M6 F2 J 7. An amount, payable in money goods, or service, owed by a business to a creditor, is known as a/an .2 U- L j) a! M
A. liability
2 [* ~- P6 p) h& y# z* B' m' W B. debt9 j* X8 o# v3 T! ?
C. equity
" Z9 f+ i6 k2 p) h* g% I8 ]- W9 z7 R D. asset& B- B) q! v: T! M- G$ x# }$ i
8. What function is money serving when you buy a ticket to a movie? ______. R. q$ u% U" M$ L: h b
A. store of value
/ b2 J7 n$ n7 A( @" E, | B. a medium of exchange
$ O( W: o* g, e0 X0 W2 N" D C. transaction demand
8 \! K6 w% I; q5 \' o3 d# H D. a unit of account
; h) ]+ @; d8 F5 b 9. If foreigners expect that the future price of sterling will be lower, the ______.& j4 H2 ?9 e" Y0 G6 q
A. supply of sterling will increase, demand for sterling will fall, and the exchange rate will fall
6 y9 j+ z8 U$ ?4 e. Q) Y- p7 o" y B. supply of sterling will increase, demand for sterling will rise, and the exchange rate may or may not increase, E* h) t8 [ N
C. supply of sterling will fall, demand for sterling will increase, and the exchange rate will rise
3 g2 I9 g: t7 m% C: H D. supply of sterling will fall, demand for sterling will fall, and the exchange rate may or may not fall |