金融英语证书考试

金融英语证书考试（FECT）Exercises-1（1）

of the following is not a function of money？ ______。?
act as a medium of exchange
act as a unit of account
act as a store of value
provide a double coincidence of wants
act as a means of payment
price in the foreign exchange market is called ______。
trade surplus
exchange rate
money price
currency rate
risk refers to the risk of______。
prices fluctuations


payments
of the following is not among the generally accepted accounting principles？ ______。
basis


concern
measurement。
is a documentary letter of credit？ ______。
conditional bank undertaking to pay an exporter on production of stipulated documentation
method of lending against documentary security
international trade settlement system biased in favour of importers
of the above
a group of assets reduces risk as long as the assets ______。
perfectly correlated
completely independent
not have precisely the same pattern of returns
a correlation coefficient greater than one
amount， payable in money goods， or service， owed by a business to a creditor， is known as aan 。




function is money serving when you buy a ticket to a movie？ ______。
of value
medium of exchange

demand
unit of account
foreigners expect that the future price of sterling will be lower， the ______。
of sterling will increase， demand for sterling will fall， and the
exchange rate will fall
of sterling will increase， demand for sterling will rise， and the
exchange rate may or may not increase
of sterling will fall， demand for sterling will increase， and the exchange rate will rise
of sterling will fall， demand for sterling will fall， and the exchange rate may or may not fall
documentary collection provides the seller with a greater degree of protection than shipping on ______。
account
's letter of guarantee
's draft
credit
of the following statements is not true of central banks？ ______。
pay the government's salaries
always undertake the regulation of the banking system
are always the lender of last resort
of the above
GBPUSD rate goes from to ， we say the dollar ______。
by %
by %
by %
by %
to diversification principle in investment， suppose you invest Stock X and Stock Y with equal funds，
which of the following is not true？ ______。
X and Y are totally independent with each other， the risk of the portfolio is reduced
X and Y are perfectly negatively correlated， the risk of the portfolio is perfectly offset
X and Y are perfectly positively correlated， the risk of the portfolio is neither reduced nor increased
X and Y are perfectly negatively correlated， the risk of the portfolio is neither reduced nor increased
are four main methods of securing payment in international trade：
（1） payment under documentary credit
（2） open account
（3） collection， that is document against payment or acceptance of a bill of exchange
（4） payment in advance
From an exporter's point of view， the order of preference is ______。
A.（4） ， （2） ， （3） ， （1）
B.（4） ， （1） ， （3） ， （2）
C.（4） ， （3） ， （1） ， （2）
D.（2） ， （4） ， （1） ， （3）
main liability on a bank balance sheet is ______。

and reserves
and overdrafts

shows that net income for a specified period of time and how it was calculated。
income statement
capital statement
accounting statement
statement of financial condition
must the liabilities and assets of a bank be actively managed？ ______。
assets and liabilities are not evenly matched on the same time scale
assets and liabilities are evenly matched
the interbank market uses LIBOR
assets and liabilities can be underwritten
the expected returns of two risky assets have a perfect negative correlation， then risk 。
increased
to zero
unaffected
reduced by one-half
possible disadvantage of freely fluctuating exchange rates with no official intervention is that 。
nations would experience continual deficits
exchange rates may experience wide and frequent fluctuations
would no longer be able to undertake domestic policies designed to achieve and maintain full
employment
would need a larger supply of international reserves than otherwise
are your GBPUSD position and the average rate if you sell ￡4m at buy ￡5m at and sell $$5m
at ？
￡2 058 long $$3 370 000 at
￡5 941 short $$9710 000 at
￡5 941 long $$9 710 000 at
￡4 058 short $$6 630 000 at
correlation coefficient of + means two stocks are ______。
negatively correlated
the market beta
to the market beta
positively correlated
percentage analysis of increases and decreases in corresponding items in comparative financial
statements is called ______。
analysis
analysis
analysis
analysis
is the name of the document which can make a buyer feel confident that goods are of a certain standard？
______。
certificate
invoice
policy

of origin
financial intermediaries by
situations because 。
rates are falling
rates are rising
increase too rapidly
rates rise relative to rates of their holdings
rates rise more sharply than short-term rates
were written ______。
the International Chamber of Commerce
the United Nations Convention for the International Sale of Goods （Vienna Convention ）
the Kyoto Protocols as adopted in 2000

purpose of keeping account is to 。
whether the business has made a profit or a loss
out why the business has lost money
how much has been spent
out why the business cannot fulfil its commitments
reserves are 20 percent， then the multiplier effect will be ______ times， so the original deposit of
RMB40 000 can create up to ______ of new deposits。
……RMB200000
……RMB120000
……RMB80000
……RMB20000
Company is the beneficiary of a confirmed irrevocable letter of bank （ s ） will assure the company
that it will be paid。




tender includes 。
and coins
only
only
， coins and checks
following are the basic functions of a bill of lading except to act as ______。
receipt for the goods from the shipping company to the exporter
document of title for goods being shipped overseas
certificate of origin， which certifies that the goods were produced in a particular country
of the carriage contract between the exporter and the carrier
foreign trade deficits under a flexible exchange rate system usually lead to ______。
in the domestic economy
of future devaluation
interest rates

imports
additional amount paid in buying or selling a currency at a given future date is called 。




manage their assets considering ______。

optimum combination of the above


is the function of the book- keeping system in bank accounting？ ______。
prove that all the day's transactions have gone through for the right amount
prove that all the day's transactions have all been posted to the right account
prove that the fresh balance of those accounts is correct after recording the transactions
of the above
risk that is specific to individual stocks is called ______。
risk
risk
risk
risk
main objective of the Exchange Equalization Account is to ______。
undue fluctuation in the exchange value of one country's own currency against other currencies
the rate of inflation
that notes and coins continue to be acceptable as a medium of exchange
the exchange of payments between banks
can you prove that no transactions are missing or wrong at the end of the day？ ______。
is no other way than have these transactions reposted to the proper entries
can examine all the transactions carefully and find the wrong records
can balance the total debits and the total credits by calculating them again
can do that by checking the total debits and the total credits to see whether they are in state of balance
_____。
as the critical function of a medium of exchange
trade in goods and services
the inefficiencies of barter
of the above
dealers buy currency forward but do not sell forward at the same time， their position is known as 。



?
if clearly incorporated into the contract of sale
International shipments beyond a certain tonnage
international shipments under the Uniform Commercial Code

all international shipments of goods
which one of the following circumstances would it be wise for your customer to arrange a forward
foreign exchange contract？ ______。
of goods priced in a foreign currency
of goods priced in RMB
of goods priced in RMB
of goods priced in a foreign currency where the rate of exchange has been agreed in the sales contract
address ______。
risks of loss between the parties
of contract
rights
of ship used
of the following is or was an example of representative full-bodied money？ ______。
money
account
certificate
deposit
associated with investing in foreign countries are the following except ______。
risk
rate risk
risk
risk
exporter sells goods to a customer abroad on FOB and on CIF is responsible for the freight charges in
each？ ______。
； Exporter
； Importer
； Importer
； Exporter
risk refers to the possibility that a borrower may ______。
unable to repay the principal on his loan
unable to make the interest payments on his loan
bankrupt of the above
is the reserve requirement？ ______。
requirement of a bank to deposit a percentage of money
requirement for deposits in cash
percentage of a bank's deposits in the form of cash reserves
requirement for cash reserves
draft is like a check that can be endorsed but it isn't a title to goods， like ______。
bill of lading
inspection certificate
certificate of origin
insurance certificate
______。
a general economic term for buying something where it is cheap and selling it where it is dear

exchange rates consistent across markets
been outlawed by the International Monetary Fund
occur where there is a forward exchange market
A and B
is the purpose of comparing the ledger entries with the documents？ ______。
prove that all the transactions have made for the right amounts
prove that all the accounts have been posted correctly
check the number of all the debits and credits
post the right is Dollar Cost Averaging？ ______。
brokerage account that gives investors cheap trades
idea that prices tend to rise over the long term
stocks that are below average in value
flat quarterly mutual fund fee averaged throughout the year
strategy of investing money on a regular basis to take advantage of market fluctuations
a Chinese bank's point of view， the currency account which it maintains abroad is known as______，
while a RMB account operated in China for a foreign bank is termed ______。
vostro account…… a nostro account
vostro account…a mirror account
mirror account…a nostro account
nostro account…… a vostro account
FOB terms the bill of lading would state goods ______。
on board， freight payable at destination
on board， freight paid
for shipment， freight paid
for shipment， freight payable at destination
liabilities of the bank as shown in its balance sheet represent the ______ which it uses in its business。
of the funds
capital

to customers
payments and other messages are often sent through an international computer network called ______。




levels of uncertainty （risk） are associated with 。

options
potential returns
potential returns
securities would appear on a commercial bank's balance sheet as ______。
asset

of net worth

liability
major problem with a fixed exchange rate system is that when countries run foreign trade deficits，
______。
is no self-correcting mechanism
values become unstable
value of the reserve currency declines
inflation increases
a particular economy banks are required to keep 25 percent of all deposits in the form of reserves； this
gives a credit-creation multiplier of ______。




of the money supply and financial markets is referred to as ______。
policy
policy
policy
policy a country runs a foreign trade deficit under a flexible foreign exchange rate system， its 。
automatically increase
automatically depreciates
automatically decline
automatically appreciates
of the following statements is not true of accounting？ ______。
is language of business
user of accounting includes business， government， nonprofit organizations and individuals。
is useful for decision making
is an end rather than a means to an end
term foreign exchange is best defined by the following statement：it is ______。
rate of exchange between two currencies
with currency exchange
place in which foreign currencies are exchanged
instrument such as paper currency， note， and check used to make payments between countries
is Asset Allocation？ ______。
assets of different types， risks， and potential returns
assets with more than one brokerage account
ability to buy mutual funds
stocks for the long term
users of financial accounting information include all of the following except 。

managers
public

is short for 。
Asset Pricing Model

Added Price Matrix
Asset Pricing Matrix
and Price Model
measures the ______。
of an asset
with which an asset can be exchanged
of an asset
and monetary reliability of an asset compared with other assets
a letter of credit transaction， the bank pays the seller against ______ which agree（s） with______。
…… the credit
…… the contract
…… the contract
……the buyer barter economy is one that does not possess _______。?
wealth currency
medium of exchange
of the following is not true of airway bill？ ______。
goods are delivered to the airline， the airway bill is signed by them or their agents as a receipt of the
goods
bill is a document of title to the goods
bill may also provide evidence of despatch of the goods where it has been stamped indicating details of
the relevant flight
of the above
value of money varies _____。
with the unemployment rate
with the price level
with the unemployment
with the price level
economics news on the television reports that the dollar has strengthened relative to the Japanese
means that ______。
dollar has depreciated relative to the yen
dollar can now purchase more yen
yen can now purchase more dollars
US trade balance with the Japanese economy has improved
theory of international exchange that holds that exchange rates are set so that the price of similar goods in
different countries is the same is the ______。
feedback theory
feedback theory
power parity theory
theory
to the optimal portfolio theory， where should portfolios lie？ ______。
the efficient frontier
the efficient frontier
the efficient frontier
， as long as the portfolio is diversified

of the following is not a user of management accounting information？ ______。
manager



on the scenarios below， what is the expected return for a portfolio with the following return profile？
______。
Market Condition
%
%
%
%
Use the following expectations on Stocks X and Y to answer questions 17 through 19 （round to the
nearest percent）。
markets serve to channel funds from ______。
government to contractors
to consumers
to producers
to investors
agreements that were reached at the Bretton Woods conference in 1944 established a system 。
essentially fixed exchange rates under which each country agreed to intervene in the foreign exchange
market when necessary to maintain the agreed-upon value of its currency
floating exchange rates determined by the supply and demand of one nation's currency relative to the
currency of other nations
prohibited governments from intervening in the foreign exchange markets
which the values of currencies were fixed in terms of a specific number of ounces of gold， which in turn
determined their values in international trading
of the following statements is not consistent with generally accepted accounting principles relating to
asset valuation？ 。
are originally recorded in accounting records at their cost to the business entity
prefer to base the valuation of assets upon objective， verifiable evidence rather than upon appraisals or
personal opinion
assume that assets such as office supplies， land and buildings will be used in business operations rather
than sold at current market prices
total liabilities from total assets indicates what the owner's equity in the business is worth under current
market conditions
fiscal expansion in the UK ______ the pound sterling。
to appreciate
to depreciate
not affect the price of
no predictable effect on the price of
are the expected returns for Stocks X and Y respectively？ ______。
% and 10%
% and 12%

% and 11%
% and 5% of the following payment terms eliminates the exchange risk， assuming the exporter invoices
in foreign currency？ ______。?
irrevocable documentary credit
account
collection DA
of the above

the viewpoint of a short-term creditor， this transaction makes the business less solvent
liabilities increased by $$7 000
assets increased by $$12 000
transaction had no immediate effect on the owner's equity in the business
of the following terms of payment will entirely eliminate country risk？ ______。
documentary credits
Irrevocable documentary credits
collection DP
collection DA
expiry date of a documentary credit is Sunday， 24 February， and documents have to be A presented to
of the following is an acceptable presentation？ （Assume there is no latest stated date for shipment
stipulated.） ______。
to you on Monday 25 February with the bill of lading dated 25 February
on Monday 25 February with the bill of lading dated Sunday 24 February
on Tuesday 26 February with the bill of lading dated Sunday 24 February
on Friday 22 February with the bill of lading dated Sunday 29 January
are the standard deviations of returns on Stocks X and Y respectively？ ______。
% and 26%
% and 13%
% and 4%
% and 8%
makes the first presentation of documents under a transferable credit？ ______。

beneficiary
beneficiary
of the above
transaction caused a $$10 000 decrease in both total assets and total transaction could have been
______。
of a $$ 10 000 bank loan
asset with a cost of $$10000 was destroyed by fire
of a delivery truck for $$10 000 cash
of a $$10 000 account receivable
ceases to serve as an effective store of value when ______。
government runs large deficits
unemployment rate is very high
in the economy declines

inflation occurs
indication that the money supply is greater than the desirable amount would be 。
spending and excessive saving

spending and rising unemployment
wages and prices
a nation's interest rates are relatively low compared to those of other countries， then the exchange value
of its currency will tend to ______ under a system of exchange rates。
…… floating
……floating
…… fixed
…… fixed
of the following is true of a company's balance sheet？ ______。
displays sources and uses of cash for the period
is unnecessary if both an income statement and a statement of cash flows are available
is a separate representation of the company's revenue and expense transactions for the year
is an expansion of the basic accounting equation of Assets=Liabilities+Owner's Equity
Americans or foreigners expect the return on dollar deposits to be high relative to the return on foreign
deposits， there is a ______ demand for dollar deposits and a correspondingly ______ demand for foreign
deposits。
…… higher
…… higher
…… lower
……lower
is the ______。
of GNP
at which checking accounts are converted into cash
between the price level and the money supply
at which money turns over
that of your $$10 000 portfolio， you invest $$9 000 in Stock X and $$1 000 in Stock is the expected
return on your portfolio？ ______。
% % % %
of the following would you expect to find in a correctly prepared income statement？ 。
balance at the end of the period
incurred during the period to earn revenues
by the owner during the period
reported company's financial position at a specific date
concept of beta is most closely associated with ______。
coefficient
capital asset pricing model
risk
analysis
velocity of money for a given year can be calculated by ______。
GNP by the money supply

aggregate supply by aggregate demand
the price level by the money supply
the price level by total output
theory of purchasing power parity states that exchange rates between any two currencies will adjust to
reflect changes in ______。
price levels of the two countries
current account balances of the two countries
fiscal policies of the two countries
trade balances of the two countries
issuing a credit， it is important for the issuing bank ______。
make certain of the importer's creditworthiness
go through the contract terms
have a thorough understanding of the exporter
of the above