金融英语证书考试FECT模拟试题-1

金融英语证书考试FECT模拟试题-1 (总分100, 考试时间90分钟) SECTION ONE (Compulsory):Answer all ten questions in this section. Each question carries 1 mark. 1. Multiple-choice questions: from the following four options, select a correct and fill in its labeling the brackets. (A total of 10 points) 1. Only what happens if the supply is less than demand? ( ) A actual price is lower than the equilibrium price B actual price is higher than the equilibrium price C equilibrium price equivalent to the actual price D eliminate the scarcity of goods 该题您未回答:х 该问题分值: 2 答案:B 2. When the Consumer income and established conditions for commodity prices is still, consumers can buy the two commodities to the greatest number of combinations. What did the Line call? ( ) A No difference curve B consumption may Line C Line and its output D enterprise budget line 该题您未回答:х 该问题分值: 2 答案:A 3. Opportunity cost: ( ) A Is always measurable in money terms. B Is an indicator of productivity performance. C Relates peculiarly to business affairs alone. D Measures the cost of doing "x" in terms of what else might be done. 该题您未回答:х 该问题分值: 2 答案:D 4. The normal downward slope of demand curves is necessarily explained by: ( ) A Growth in the size of the population. B The adroitness of advertisers. C Limited spending power. D Technological advance. 该题您未回答:х 该问题分值: 2 答案:C 5. For a closed two-good economy, the output of the two goods should be at the point where: ( ) A The highest indifference curve touches the production possibility curve. B The lowest indifference curve touches the production possibility curve. C The indifference curve crosses the production possibility curve. D The marginal cost curve touches the production possibility curve. 该题您未回答:х 该问题分值: 2 答案:A 6. The "J-curve" shows that following depreciation: ( ) A The quantity of exports falls, making the current account balance worse. B Here is an initial drop in imports but this is later reversed. C The cost of imports rises immediately from the price effect, worsening the current account balance, but later quantities of imports and exports respond and the current account balance improves. D There is an improvement in the balance of payments so long as the Marshall-Lerner conditions are met. 该题您未回答:х 该问题分值: 2 答案:C 7. Which of the following statements about standby letters of credit is true? :( ) A They can serve as a guarantee to a buyer against a seller defaulting B They are contrary to the general rule that letters of credit may only be used for the actual movement of goods C They are unlike a tender (or other) bond in their legal standing and method of operation D They are unlike a tender bond with its fixed expiry date 该题您未回答:х 该问题分值: 2 答案:A 8. What information would you find in a statement of cash flows that you would not be able to get from the other two primary financial statements? ( ) A Cash provided by or used in financing activities B Cash balance at the end of the period C Total liabilities due to creditors at the end of the period D Net income 该题您未回答:х 该问题分值: 2 答案:C 9. Which of these best describes the U.S. Federal Reserve? ( ) A Responsible for monetary policy/money supply B Prints money. C Keeps the country out of debt. D Helps people in need. 该题您未回答:х 该问题分值: 2 答案:A 10. What is the basic purpose of profits in our market economy? ( ) A Pay for wages and salaries of workers. B Lead businesses to produce what consumers want. C Transfer income to the wealthy. D All of the above. 该题您未回答:х 该问题分值: 2 答案:B SECTION TWO(Compulsory):Answer the questions in this section. Reading Comprehension: (10 points) Laura James is the head portfolio manager for National Fund, a U.S. based mutual fund with a well-respected track record. National’s primary focus is on large-cap domestic equities, and the fund has consistently posted high returns relative to its peer group over the past seven years. Much of National’s recent success is from its investments in the U.S. automobile industry, which have posted extraordinary returns due to a favorable economic scenario. Over the past seven years, the U.S. economy has been expanding, foreign competition has not met consumer expectations, and oil prices have remained low. These factors have contributed to an increase in market share for the domestic producers (at the expense of foreign competitors), and the result has been strong earnings for the top U.S. automakers. Ford Motor Company, in particular, has enjoyed tremendous success in this environment. Ford has capitalized on the trend toward bigger vehicles, particularly sport utility vehicles (SUVs), and has outperformed the other domestic auto makers. Ford jumped on the SUV bandwagon early, and established its dominance. Other domestic auto makers followed, with foreign producers being the last to embrace the trend. Ford has increased its market share in an increasingly competitive industry. James is constantly reviewing economic forecasts and industry data in order to assess the expected performance of the investments in National’s portfolio. Due to changes in economic policy and recent volatility in energy prices, James now believes that current market conditions exhibit signs of contraction (recession). In addition, the automobile sector may be facing additional negative factors. In particular, James has concerns regarding the SUV segment of the automobile industry. Although she believes they will remain popular, she is concerned that the market may be reaching a point of saturation. In addition, volatile energy prices may dampen consumers’ enthusiasm for large vehicles. Lastly, foreign competitors have increased efforts toward the production of SUVs, thus “crowding” the market with many new models. 11. Assume an industry exhibits tendencies of “regression toward the mean.” This could mean all of the following EXCEPT: ( ) A Profits are high and competition increases from other firms in the industry. B Profits increase as firms enter the industry. C Profits are low and firms flee the industry. D Prices could increase or decrease depending on the level of profits. 该题您未回答:х 该问题分值: 3 答案:B Profitability in a particular industry attracts competition from other firms, which then forces prices down, eventually reducing profits back to a long-run normal level. The opposite holds true for industries experiencing losses. 12. In a recessionary environment, an automaker such as Ford would be expected to: ( ) A Produce higher end vehicles. B Maintain the same product mix as 5 years ago. C Gain market share if it produces high end vehicles. D Produce lower end vehicles. 该题您未回答:х 该问题分值: 3 答案:D During economic downturns, producers of low-cost products increase their market share at the expense of high-cost producers. This also is true within firms that produce various priced products. 13. Assume domestic automakers are growing at a rate of –2%. Ford expects to increase its market share by 0.5%. What is Ford’s growth rate? ( ) A 1.5%. B -3.0%. C -1.5%. D 3.0%. 该题您未回答:х 该问题分值: 3 答案:C (1 + growth of firm sales) = (1 + growth of industry sales) x (1 + fractional change of market share) = 0.98 x 1.005 = 0.9849 Growth of firm sales = –1.51% 14. Suppose instead that Ford’s growth of firm sales is expected to be –3% and the growth of industry sales is 1%. What is Ford’s expected change in market share? ( ) A 3%. B -3%. C -4%. D 4%. 该题您未回答:х 该问题分值: 3 答案:C 0.97 = 1.01 x (1 + x) 0.9604 = 1 + x –3.96% = x 15. Which of the following scenarios would be most likely to have a positive impact on Ford’s market share? ( ) A New carmakers enter the market. B An increase in its marketing budget. C War with an oil producing country. D The overall number of cars sold increases. 该问题分值: 3 该题您未回答:х 答案:B An increase in its marketing budget. The percentage change in a firm’s market share is directly proportional to the percentage change in its marketing expenditures. An increase in the overall number of cars sold would not necessarily change Ford’s market share. New competition would be negative, as would war, as Ford’s share of the SUV market (gas guzzlers) is large. Explanations of terms:(10 points) 16. Official interest rate 该题您未回答:х 该问题分值: 6 答案: Official interest rate :Official interest rate is the rate set by the central bank or monetary authorities. The interest rate is one of levers used by governments to regulate economy. 17. Fiat money 该题您未回答:х 该问题分值: 6 答案: Fiat money:Money proclaimed to be money by fiat or government decree is sometimes called fiat money. 18. GDP 该题您未回答:х 该问题分值: 6 答案: GDP:The monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. 19. Mean 该题您未回答:х 该问题分值: 6 答案: Mean:A measure of central tendency of the probability distribution of a random variable that equals the weighted average of all possible outcomes using their probabilities as weights. 20. Primary markets 该题您未回答:х 该问题分值: 6 答案: Primary markets:Financial markets in which newly issued debt or equity claims are sold to initial buyers by private borrowers to raise funds for durable-goods purchases or new ventures and by governments to finance budget deficits. 21. What are the basic objectives of economic policies? 该题您未回答:х 该问题分值: 6 答案: Since the Great Depression of the 1930s, governments have actively pursued the goal of economic stability at full employment. Known as internal balance, this objective has two dimensions; (D a fully employed economy, and ?no inflation—or, more realistically, a reasonable amount of inflation. Nations traditionally have considered internal balance to be of primary importance and have formulated economic policies to attain this goal. Policy makers are also aware of a nation’s balance-of-payments (BOP) position. A nation is said to be an in external balance when it realizes neither BOP deficits nor BOP surpluses. In practice, policy makers usually express external balance in terms of a BOP sub account, such as the current account. In this context, external balance occurs when the current account is neither so deeply in deficit that the home nation is incapable of repaying its foreign debts in the future nor so strongly in surplus that foreign nations cannot repay their debts to it. Although nations usually consider internal balance to be the highest priority, they are sometimes forced to modify priority when confronted with large and persistent external imbalances. 22. What is the Money Market Mutual Funds? 该题您未回答:х 该问题分值: 6 答案: The money markets are wholesale markets where most securities trade in large denominations. This characteristic effectively blocks most individuals from investing directly in these securities. However, the markets usually find a way to correct for such deficiencies, especially when potential customers are available. Money market mutual funds represent one such correction. Money market mutual funds (MMMFs) are funds that aggregate money from a group of small investors and invest it in money market. They have grown enormously popular since their inception in the early 1970s because they provide a means for small investors to take advantage of the returns offered on money market securities. These securities would be out of reach to most small investors because of their large minimum denominations. 23. Why Should I Lease Equipment Instead of Buy, 该问题分值: 6 该题您未回答:х 答案: (1) Leasing is flexible. Companies have different needs, different cash flow patterns, different irregular streams of income. For example, start-up companies typically are characterized by little cash and limited debt lines. Mature companies might have other needs: to keep debt lines free, to comply with debt covenants, and to avoid committing to equipment that may quickly become obsolete. Therefore, your business conditions—cash flow, specific equipment needs, and tax situation— may help define the terms of your lease. Moreover, a lease provides the use of equipment for specific periods of time at fixed rental payments. Therefore, leasing allows you to be more flexible in the management of your equipment. (2) Leasing is practical. By leasing, you transfer the uncertainties and risks of equipment ownership to the lessor, which allows you to concentrate on using that equipment as a productive part of your business. (3) Leasing is cost effective. Equipment is costly and some of the costs are unexpected. When you lease, your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to best meet your needs. Further, your equipment needs can change over time due to changes in your company, such as diversification. Leasing allows you to stay on the cutting edge of technology. Sophisticated business managers have learned that the primary benefits of higher productivity and profit come from the use of equipment, not owning it. (4) Leasing has tax advantages. Rather than dealing with depreciation schedules and Alternative Minimum Tax (AMT) problems, you, the lessee, simply make the lease payment and deduct it as a business expense. (5) Leasing helps conserve your operating capital. Leasing keeps your lines of credit open. You don’t tie up your cash in equity. Also, you avoid costly down payments. With other advantages such as offbalance sheet financing, leasing helps you better manage your balance sheet. 24. Tell us The Practice of China’s Monetary Policy since Economic Reform and Opening up briefly? 该题您未回答:х 该问题分值: 17 Under the traditional planned economic system, there were only such concepts as credit management, cash management and so on. As a comprehensive concept monetary policy came into being in China in the process of economic reform and establishment of the market economy when the experience of money and credit management in western countries was used for reference. China’s monetary policy, in general sense, is the same as the concept of monetary policy in western economics, including such factors as operating instruments, operating targets, intermediate targets and final targets. The impact of monetary policy on China’s macro-economy is produced through the transmission of those factors one by one. (1) The final targets of China’s monetary policy The present final target of China’s monetary policy is “to maintain a steady currency and promote economic growth". Price stability is the precondition and basis of normal operation of economy. If too much money is issued and inflation occurs, it is hard to control market prices, stabilize people’s living standard and maintain steady economic growth. Economic development in turn provides material base for stabilizing currency. Only by supporting the reasonable demand for productive funds and increasing supply of commodities needed in the market can there be a reliable material base for steady currency. (2) The operating and intermediate targets of China’s monetary policy Before 1984 when the PBC functioned as a central bank, the operating and intermediate targets of monetary policy were credit quota and the amount of cash issue. After 1984, the central bank lending to financial institutions was included in "operating targets" and has become important ever since. In 1993, the Decision on Financial Reform issued by the State Council stipulated that intermediate and operating targets are “money supply, the total credit, and the inter-bank offered rate and bank reserve rate". In 1995, the PBC started its attempt to take M, and M2 as the intermediate target. In 1996, the PBC regularly adopted M and M2 in the intermediate targets of its monetary policy. (3) The monetary policy instruments Up to now, credit plan and cash plan have been the basic monetary policy instruments in China. But officially set deposit and lending interest rates, basic interest rate, required reserve ratio, bank reserve rate, the central bank lending rate, discount rate, special deposits and open market operations have become monetary policy instruments one after another and played a more and more important role. The Law of the People’s Republic of China on the People’s Bank of China passed in March 1995 stipulates that monetary policy instruments are reserve requirement, basic interest rate, the central bank lending rate, discount rate, open market operations and other monetary policy instruments set by the State Council. So the system of monetary policy instruments that conform to the socialist market economy has been lawfully set up. With the establishment of socialist market economy the gradual shift from direct to indirect monetary policy instruments has greatly improved transmission mechanism of monetary policy and effectiveness of macroeconomic management in China. But in a transition period the potency of monetary policy is still subject to various factors as follows: ?Government’s intervention. In economic activities, intervention by governments at each level is still strong. It is not rarely seen that local governments often force banks to make loans for the sake of development of local economy, which interferes the independence of the central bank’s monetary policy and blurs monetary policy targets, so monetary policy instruments are partly ineffective. ?Less developed markets. In the transition period market mechanism is not perfect while the planned mechanism has lost much of its share. So the vacuum in management of national economy appears. As a result distribution of resources is in disorder and the contradiction in economic structure is obvious. The central government has to increase investment in order to better economic structure, so it’s hard to contract investment size, wipe out investment expansion of fixed assets and control the money supply. So implementation of monetary policy of the central bank is interfered with. ?Imperfect self-constraint mechanism of financial institutions. As China’s financial institutions are still under reform, their behavior is not standardized because of imperfect self-constraint mechanism. So the impact of the central bank’s monetary policy on reserves of financial institutions is not sure and the operating targets cannot respond sensitively. ?Lack of self-constraint mechanism of enterprises. In order to maintain certain increasing rate of production enterprises in China have a strong demand for funds from outside as they usually have low level of accumulation. At present the supply of funds from outside enterprises mainly comes from commercial bank. It places great pressure on the credit control by commercial banks and the central bank and is harmful to the central bank’s control on the money supply. ?Less developed financial markets with fewer types and amount of financial assets. As there is fewer types and amount of financial assets it’s difficult for the open market operation to play its role in regulating macro-economy. To sum up, the central bank’s experience in managing macro economy has been richer and its ability to adapt to new environment has become stronger with the deepening of China’s economic and financial reform. Though there are short points existing in both micro-entities and the central bank, it-is true to the fact that the operation of monetary policy in China is becoming more and more experienced.