金融英语证书考试

1、金融英语证书考试（FECT） Exercises-1 （ 1）.Which of the following is not a function of money？ 。 ?A.To act as a medium of exchangeB.To act as a unit of accountC.To act as a store of valueD.To provide a double coincidence of wantsE.To act as a means of payment.The price in the foreign exchange market is called 。

2、A.the trade surplusB.the exchange rateC.the money priceD.the currency rate.Market risk refers to the risk of。A.financial prices fluctuationsB.defaultC.fraudD.deferred payments.Which of the following is not among the generally accepted accounting principles ？ 。A.Cash basisB.PrudenceC.ConsistencyD.Goi

3、ng concernE.Money measurement。.What is a documentary letter of credit ？ 。A.A conditional bank undertaking to pay an exporter on production of stipulated documentationB.A method of lending against documentary securityC.An international trade settlement system biased in favour of importersD.All of the

4、 above.Holding a group of assets reduces risk as long as the assets 。A.are perfectly correlatedB.are completely independentC.do not have precisely the same pattern of returnsD.have a correlation coefficient greater than one.An amount ， payable in money goods ， or service ， owed by a business to a cr

5、editor ， is known as a/an 。A.liabilityB.debtC.equityD.asset.What function is money serving when you buy a ticket to a movie？ 。A.store of valueB.a medium of exchangeC.transaction demandD.a unit of account9.If foreigners expect that the future price of sterling will be lower， theA.supply of sterling w

6、ill increase，demand for sterling will fall，and theexchange rate will fallB.supply of sterling will increase，demand for sterling will rise，and theexchange rate may or may not increaseC.supply of sterling will fall， demand for sterling will increase ， and theexchange rate will riseD.supply of sterling

7、 will fall ， demand for sterling will fall ， and the exchange rate may or may not fall10.The documentary collection provides the seller with a greater degree of protection than shipping on 。A.open accountB.banks letter of guaranteeC.bankers draftD.documentary credit11.Which of the following statemen

8、ts is not true of central banks？ A.They pay the governments salaries.They always undertake the regulation of the banking systemC.They are always the lender of last resortD.None of the above.When GBP/USD rate goes from 1.6150 to 1.8500， we say the dollar 。A.appreciates by 12.70%B.depreciates by 14.55

9、%C.depreciates by 12.70%D.appreciates by 14.55%.According to diversification principle in investment， suppose you investStock X and Stock Y with equal funds ， which of the following is not true ？ A.If X and Y are totally independent with each other ， the risk of the portfolio is reducedthe risk of t

10、he portfoliothe risk of the portfoliothe risk of the portfoliothe risk of the portfoliothe risk of the portfolioC.If X and Y are perfectly positively correlated is neither reduced nor increasedD.If X and Y are perfectly negatively correlated is neither reduced nor increased.These are four main metho

11、ds of securing payment in international trade：payment underdocumentary creditopen accountcollection ，thatisdocument against payment or acceptance of a bill ofexchangepayment in advanceFrom an exporters point of view， the order of preference isA. (4） ，（ 2），（ 3），（ 1）B. (4） ，（ 1），（ 3），（ 2）C. (4） ，（ 3），

12、（ 1），（ 2）D. (2） ，（ 4），（ 1），（ 3）.The main liability on a bank balance sheet is 。A.depositsB.capital and reservesC.loans and overdraftsD.cash.shows that net income for a specified period of time and how it wascalculated 。A.The income statementB.The capital statementC.The accounting statementD.The stat

13、ement of financial condition.Why must the liabilities and assets of a bank be actively managed ？ 。A.Because assets and liabilities are not evenly matched on the same time scaleBecause assets and liabilities are evenly matchedC.Because the interbank market uses LIBORD.Because assets and liabilities c

14、an be underwrittenf the expected returns of two risky assets have a perfect negative correlation ， then risk 。A.is increasedB.falls to zeroC.is unaffectedD.is reduced by one-half.A possible disadvantage of freely fluctuating exchange rates with no official intervention is that 。A.some nations would

15、experience continual deficitsB.the exchange rates may experience wide and frequent fluctuationsC.nations would no longer be able to undertake domestic policies designed toachieve and maintain full employmentD.nations would need a larger supply of international reserves than otherwise.What are your G

16、BP/USDPosition and the average rate if you sell 4mat 1.6350 buy 5m at 1.6340 and sell $5m at 1.6348?A.Short 2 058 478.10 long $3 370 000 at 1.6371B.Long 5 941 521.90 short $9710 000 at 1.6342C.Short 5 941 521.90 long $9 710 000 at 1.6342D.Long 4 058 478.10 short $6 630 000 at 1.633621.A correlation

17、coefficient of +1.0 means two stocks are 。A.perfectly negatively correlatedB.opposite the market betaC.equal to the market betaD.perfectly positively correlated22.The percentage analysis of increases and decreases in corresponding items in comparative financial statements is called 。A.external analy

18、sisB.horizontal analysisC.vertical analysisD.comparative analysis23.What is the name of the document which can make a buyer feel confident that goods are of a certain standard ？ 。A.Inspection certificateB.Commercial invoiceC.Insurance policyD.Certificate of origin24.Sometimes financial intermediarie

19、s by borrowing short and lending longfind themselves in difficult financial situations because。A.short-term rates are fallingB.long-term rates are risingC.deposits increase too rapidlyD.short-term rates rise relative to rates of their holdingsE.long-term rates rise more sharply than short-term rates

20、25.Incoterms were written 。A.by the International Chamber of CommerceB.under the United Nations Convention for the International Sale of Goods( Vienna Convention )C.under the Kyoto Protocols as adopted in 200026.The purpose of keeping account is to 。A.determine whether the business has made a profit

21、 or a lossB.find out why the business has lost moneyC.see how much has been spentD.find out why the business cannot fulfil its commitments7.If 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。A.5RMB200000B.4RMB1

22、20000C.3RMB80000D.6RMB20000.ABC Company is the beneficiary of a confirmed irrevocable letter of credit.bank ( s ) will assure the company that it will be paid。A.OneB.NoneC.ThreeD.Two.Legal tender includes 。A.notes and coinsB.notes onlyC.coins onlyD.notes ， coins and checks.The following are the basi

23、c functions of a bill of lading except to act as 。A.a receipt for the goods from the shipping company to the exportera document of title for goods being shipped overseasC.a certificate of origin ， which certifies that the goods were produced in a particular countryD.evidence of the carriage contract

24、 between the exporter and the carrier.Persistent foreign trade deficits under a flexible exchange rate system usually lead to 。A.inflation in the domestic economyB.speculation of future devaluationC.falling interest ratesD.rising imports.The additional amount paid in buying or selling a currency at

25、a given future date is called 。A.premiumB.commissionC.tariffD.dividend.Banks manage their assets considering 。A.risksome optimum combination of the aboveC.earningsD.liquidity.What is the function of the book-keeping system in bank accounting ？ 。A.To prove that all the days transactions have gone thr

26、ough for the right amountB.To prove that all the days transactions have all been posted to the right accountC.To prove that the fresh balance of those accounts is correct after recording the transactionsD.All of the above.The risk that is specific to individual stocks is called 。A.systematic riskB.c

27、ountry riskC.unsystematic riskD.market risk.The main objective of the Exchange Equalization Account is to 。A.prevent undue fluctuation in the exchange value of one countrys own currency against other currenciesB.control the rate of inflationC.ensure that notes and coins continue to be acceptable as

28、a mediumof exchangeD.permit the exchange of payments between banks.How can you prove that no transactions are missing or wrong at the end ofthe day ？ A.There is no other way than have these transactions reposted to the proper entriesB.We can examine all the transactions carefully and find the wrong

29、recordsC.Wecan balance the total debits and the total credits by calculating them againD.Wecan do that by checking the total debits and the total credits to see whether they are in state of balance.Money 。A.serves as the critical function of a medium of exchangeB.facilitates trade in goods and servi

30、cesC.overcomes the inefficiencies of barterD.all of the above39.If dealers buy currency forward but do not sell forward at the same time，their position is known as 。A.shortB.forerunnerC.speculation ?A.only if clearly incorporated into the contract of saleB.to International shipments beyond a certain

31、 tonnageC.to international shipments under the Uniform Commercial CodeD.to all international shipments of goods41.Under which one of the following circumstances would it be wise for your customer to arrange a forward foreign exchange contract？ 。A.Import of goods priced in a foreign currencyB.Import

32、of goods priced in RMBC.Export of goods priced in RMBD.Export of goods priced in a foreign currency where the rate of exchange has been agreed in the sales contractncoterms address 。A.the risks of loss between the partiesB.breaches of contractC.ownership rightsD.type of ship used.Which of the follow

33、ing is or was an example of representative full-bodied money？ 。A.Debt moneyB.ATS accountC.Gold certificateD.Demand deposit.Risks associated with investing in foreign countries are the following exceptA.voting riskB.exchange rate riskC.country riskD.political risk.An exporter sells goods to a custome

34、r abroad on FOB and on CIF term.Who is responsible for the freight charges in each？ 。A.Exporter；ExporterB.Exporter；ImporterC.Importer；ImporterD.Importer；Exporter.Default risk refers to the possibility that a borrower may 。A.be unable to repay the principal on his loanB.be unable to make the interest

35、 payments on his loanC.go bankrupt D.all of the above.What is the reserve requirement ？ 。A.The requirement of a bank to deposit a percentage of moneyB.The requirement for deposits in cashC.The percentage of a banks deposits in the form of cash reservesD.The requirement for cash reserves.A draft is l

36、ike a check that can be endorsed but it isnt a title to goodslike 。A.a bill of ladingB.an inspection certificateC.a certificate of originD.an insurance certificate.Arbitrage 。A.is a general economic term for buying something where it is cheap and selling it where it is dearB.keeps exchange rates con

37、sistent across marketsC.has been outlawed by the International Monetary FundD.cannot occur where there is a forward exchange marketE.both A and B.What is the purpose of comparing the ledger entries with the documents？A.To prove that all the transactions have made for the right amountsB.To prove that

38、 all the accounts have been posted correctlyC.To check the number of all the debits and creditsD.To post the right accounts51.What is Dollar Cost Averaging？ 。A.A brokerage account that gives investors cheap tradesB.The idea that prices tend to rise over the long termC.Buying stocks that are below av

39、erage in valueD.A flat quarterly mutual fund fee averaged throughout the yearE.A strategy of investing money on a regular basis to take advantage of market fluctuations52.From a Chinese banks point of view， the currency account which it maintains abroad is known as， while a RMBaccount operated in Ch

40、ina for a foreign bankis termed 。A.a vostro account a nostro accountB.a vostro account a mirror accountC.a mirror account a nostro accountD.a nostro account a vostro account53.Under FOB terms the bill of lading would state goods 。A.loaded on board ， freight payable at destinationB.loaded on board ，

41、freight paidC.received for shipment，freightpaidD.received for shipment，freightpayable at destination54.The liabilities ofthebank asshownin its balancesheet represent the which it uses in its business 。A.sources of the fundsB.share capitalC.investmentsD.advances to customersnternational payments and

42、other messages are often sent through an international computer network called 。A.CHAPSB.BACSC.SWIFTD.EIMT.Low levels of uncertainty （ risk ） are associated with 。A.stocksB.stock optionsC.higher potential returnsD.lower potential returns.Government securities would appear on a commercial banks balan

43、ce sheet as 。A.an assetB.reservesC.part of net worthD.a liability.A major problem with a fixed exchange rate system is that when countries run foreign trade deficits ， 。A.there is no self-correcting mechanismB.currency values become unstableC.the value of the reserve currency declinesD.world inflati

44、on increases59.In a particular economybanks are required to keep 25 percent of all deposits in the form of reserves ； this gives a credit-creation multiplier of 。A.fourB.threeC.twoD.five60.Regulation of the moneysupply and financial markets is referred to as 。A.fiscal policyB.income policyC.monetary

45、 policyD.budgetary policy 61.When a country runs a foreign trade deficit under a flexible foreign exchange rate system ， its 。A.imports automatically increaseB.currency automatically depreciatesC.exports automatically declineD.currency automatically appreciates.Which of the following statements is n

46、ot true of accounting？ 。A.Accounting is language of businessB.The user of accounting includes business ， government ， nonprofit organizations and individuals 。C.Accounting is useful for decision makingD.Accounting is an end rather than a means to an end.The term foreign exchange is best defined by t

47、he following statement ： it is 。A.the rate of exchange between two currenciesB.synonymous with currency exchangeC.the place in which foreign currencies are exchangedD.an instrument such as paper currency ， note ， and check used to makepayments between countries.What is Asset Allocation ？ 。A.Buying a

48、ssets of different types ， risks ， and potential returnsBuying assets with more than one brokerage accountC.The ability to buy mutual fundsD.Buying stocks for the long term.External users of financial accounting information include all of the following except 。A.suppliersB.line managersC.general pub

49、licD.creditors.CAPM is short for 。A.Capital Asset Pricing ModelB.Cash Added Price MatrixC.Capital Asset Pricing MatrixD.Cost and Price Model.Liquidity measures the 。A.value of an assetease with which an asset can be exchangedC.usefulness of an assetD.economic and monetary reliability of an asset com

50、pared with other assets68.In a letter of credit transaction， the bank pays the seller against which agree （ s） with 。A.documents the creditB.merchandise the contractC.documents the contract.merchandisethe buyer ordered69.A barter economy is one that does notpossess 。 ?A.any wealth B.printed currency

51、C.a medium of exchange D.gold.Which of the following is not true of airway bill？ 。A.When goods are delivered to the airline ， the airway bill is signed by them or their agents as a receipt of the goodsB.Airway bill is a document of title to the goodsC.Airway bill may also provide evidence of despatc

52、h of the goods where it has been stamped indicating details of the relevant flightD.None of the above.The value of money varies 。A.directly with the unemployment rateB.directly with the price levelC.inversely with the unemploymentD.inversely with the price level.The economics news on the television

53、reports that the dollar has strengthened relative to the Japanese yen.This means that 。A.the dollar has depreciated relative to the yenB.the dollar can now purchase more yenC.the yen can now purchase more dollarsD.the US trade balance with the Japanese economy has improved.The theory of internationa

54、l exchange that holds that exchange rates are set so that the price of similar goods in different countries is the sameis the 。A.price feedback theoryB.trade feedback theoryC.purchasing power parity theoryD.J-curve theory.According to the optimal portfolio theory， where should portfolios lie ？A.On t

55、he efficient frontierB.Above the efficient frontierC.Under the efficient frontierD.Anywhere， as long as the portfolio is diversified.Which of the following is not a user of management accounting information ？A.Store managerB.CreditorC.CEOD.CFO.Based on the scenarios below ， what is the expected retu

56、rn for a portfolio with the following return profile？ 。Market ConditionA.4%B.10%C.20%D.25%Use the following expectations on Stocks X and Y to answer questions 17 through 19 ( round to the nearest percent ) 。.Financial markets serve to channel funds from 。A.the government to contractorsB.investors to

57、 consumersC.consumers to producersD.savers to investors.The agreements that were reached at the Bretton Woods conference in 1944 established a system 。A.of essentially fixed exchange rates under which each country agreed to intervene in the foreign exchange market when necessary to maintain the agre

58、ed-upon value of its currencyB.of floating exchange rates determined by the supply and demandof one nations currency relative to the currency of other nationsC.that prohibited governments from intervening in the foreign exchange marketsD.in which the values of currencies were fixed in terms of a spe

59、cific numberof ounces of gold ， which in turn determined their values in international trading.Which of the following statements is not consistent with generally accepted accounting principles relating to asset valuation？。A.Assets are originally recorded in accounting records at their cost to the bu

60、siness entityB.Accountants prefer to base the valuation of assets upon objective ， verifiable evidence rather than upon appraisals or personal opinionC.Accountants assume that assets such as office supplies ， land and buildings will be used in business operations rather than sold at current market p