金融英语考试模拟试题及答案3.docx

金融英语考试模拟试题及答案3.docx

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金融英语考试模拟试题及答案3

2012年金融英语考试模拟试题及答案（3）

SECTIONONE（Compulsory）：

Answeralltenquestionsinthissection.Eachquestioncarries1mark. 

　　1.Multiple-choicequestions:

fromthefollowingfouroptions,selectacorrectandfillinitslabelingthebrackets.（Atotalof10points） 

　　1.Aproductionfunctionforafirmdescribes:

（） 

　　A.Whatshouldbeproducedtomaximizeprofit. 

　　B.Whatistechnologicallyfeasiblewhenthefirmproducesefficiently. 

　　C.Whatrevenueisearnedfromproducingefficiently. 

　　D.Whatthefirmproduceswithgiveninputs. 

　　2.Whichofthefollowingisnotacharacteristicofacompetitiveindustry?

（） 

　　A.Therearemanyfirms. 

　　B.Allfirmsproducehomogeneousproducts,whicharesubstitutableforeachother. 

　　C.Thereisafiercepricewaramongrivals. 

　　D.Firmscanenterandexittheindustryfreely. 

　　3.TheCentralBankintheopenmarketbuyingandsellingofsecuritiesisdesignedto:

（） 

　　A.regulationbondprices 

　　B.achieveprofitmaximization 

　　C.regulatemoneysupply 

　　D.adjustpriceslevel 

　　4.Whatunemploymentisformedbecauseoftheeconomicrecession?

（） 

　　A.frictionunemployment 

　　B.structuralunemployment 

　　C.cyclicalunemployment 

　　D.naturalunemployment 

　　5.Afteralongraceonahotday,arunnerenjoysherfirstdrinkalot,thesecondsheenjoyslessandshedeclinesathirddrink.Thisillustratestheprincipleof:

（） 

　　A.Increasingmarginalutility. 

　　B.Decreasingmarginalutility. 

　　C.Increasingmarginalcost. 

　　D.Decreasingmarginalcost. 

　　6.Onahotday,thepriceandthequantitysoldoficecreamsbothincrease.Thiscanreflecta:

（） 

　　A.Shiftinthedemandcurvetotheright. 

　　B.Movealongthedemandcurve. 

　　C.Shiftinthedemandcurvetotheleft. 

　　D.Shiftinthesupplycurvetotheright. 

　　7.Whenacountry’scurrencyappreciates,thecountry’sgoodsabroadbecome______andforeigngoodsinthatcountrybecome______. 

　　A.cheaper...moreexpensive 

　　B.moreexpensive...cheaper 

　　C.cheaper...cheaper 

　　D.moreexpensive...moreexpensive 

　　8.AUScompanyisbiddingforacontractinChina.ItsChinesecustomerasksforaperformancebond.Whatisthemostlikelycourseofaction?

（） 

　　A.Itasksitsbanktoissueatenderbondwhichcanbeconvertedintoaperformancebond 

　　B.Itgivesupitsbid 

　　C.Itconsultsitsbankaboutissuingastandbyletterofcredit 

　　D.Itasksitsbanktoissueaperformancebond 

　　9.Thereisadeficitinthefederalbudgetwhen:

（） 

　　A.Federalgovernmentspendingisgreaterthanfederaltaxrevenues. 

　　B.U.S.importsaregreaterthanU.S.exports. 

　　C.Thetotaldemandformoneyisgreaterthanthetotalsupplyofmoney. 

　　D.U.S.importsaresmallerthanU.S.exports. 

　　10.Mrs.Jonespurchaseda20-yearTreasurybondbearinga12%couponrate.Shepurchasedthebondatpar（$1000）.Ifratesfallto9%whatwillbethenewpriceofthebond?

（） 

　　A.$1333 

　　B.$1500 

　　C.$750 

　　D.$900 

　　E.Therewillbenochangeinthepriceofthebond. 

　　SECTIONTWO（Compulsory）：

Answerthequestionsinthissection. 

　　ReadingComprehension:

（10points） 

　　JamesSigmund,CFA,istheHeadofInternationalEquityforPellGlobalAdvisors（PGA）.SigmundisconsideringinvestinginthecountryofZuflakaspartofanemergingmarketportfolio.Sigmundisawareoftherisksininvestinginemergingmarketsandispreparingavaluationreportregardingthisinvestment.HeestimatesthatZuflakgovernmentdebtwouldberatedBB,andhasgatheredthefollowingmarketinformationforuseinanalyzingZuflak. 

　　LocalGovernmentBondYield=11.50% 

　　U.S.10yearTreasuryBondYield=4.50% 

　　U.S.BBratedCorporateBondYield=7.75% 

　　LocalInflationRate=6.50% 

　　U.S.InflationRate=3.00% 

　　ToassistinhisanalysisofZuflak,SigmundhasaskedStefanoTestorf,CFA,toestimateavalueforKianiCorporation（Kiani）,OlegIndustries（Oleg）,andMalikIncorporated（Malik）-thethreeprimarycompaniesdomiciledinZuflakthatSigmundhasdeterminedtohaveadequateliquidityforinclusioninPGA’sclientportfolios.TestorfgivesSigmundaroughdraftofhisreportandtellsSigmundthatinordertoaccountforcountryspecificemergingmarketrisks;heusedaprobability-weightedscenarioanalysistoadjustcashflows.Sigmundaskshim,“Whydidn’tyousimplyadjustthediscountrate?

”Testorfreplieswiththreereasons:

　　Reason1:

ThecountryriskattributabletoZuflakcanbediversifiedawayaccordingtomodernfinancetheory,andshouldnotbeincludedinthecostofcapital. 

　　Reason2:

Companiesinemergingmarketstendtoexhibitwildpriceswingsbothupanddown,thereforeadjustingcashflowsisthebestwaytoaccountforthesesymmetricalcountryrisks. 

　　Reason3:

AlthoughKiani,Oleg,andMalikarealldomiciledinZuflak,eachofthesecompanieswilltendtoresponddifferentlytocountryrisks.Thismakesitvirtuallyimpossibletoadjustthediscountrateforcountryspecificriskandcomeupwithanaccuratevaluationestimate. 

　　AftercarefulanalysisbySigmundandhisteam,SigmunddecidesthathewantstohaveexposuretoZuflakinhisinternationalportfolios.Heisstillunsurehowever,whatthebestwaywouldbetoestablishtheexposure.SigmunddiscusseshisconcernswithSteveSolak,anotherportfoliomanagerwithPGA.SolaksuggeststhatSigmundconsiderusingaclosed-endcountryfundtoinvestinZuflak.SolakhandsSigmundacopyofanotethathehadprovidedtoaclientlistingfactsaboutcountry-specificclosedendfunds.Thenotecontainedthefollowingstatements:

　　Closed-endcountryfundsprovideanexcellentmeanstoaccesslocalforeignmarkets.Evennationsthathaverestrictionsonforeigninvestmentaresometimesaccessibleusingclosed-endcountryfunds. 

　　Closed-endcountryfundsissueafixednumberofsharesandareagreatwaytodiversifyaU.S.-dollarstockportfoliobecauseoftheirlowcorrelationwiththeU.S.stockmarket. 

　　SigmundthanksSolakfortheinformationandheadsbacktohisoffice.Asheisleaving,SolakaskshimifhewouldhavetimelaterthatafternoontodiscusstheuseofAmericanDepositoryReceipts（ADRs）. 

　　Part1） 

　　WhatisthebestestimateofthecountryriskpremiumforZuflak?

（） 

　　A.0.25%. 

　　B.1.50%. 

　　C.2.75%. 

　　D.6.00%. 

　　Part2） 

　　TodetermineavaluationestimateforOleg,Testorfassumesthatlocalinvestorsrequirea5percentrealrateofreturnoncompanieswithsimilarrisktoOleg.WhatisOleg’sprice-to-earnings（P/E）ratio,ifthecompanyhasaninflationflow-throughrateof65percent?

（） 

　　A.13.75. 

　　B.5.33. 

　　C.3.00. 

　　D.21.25 

　　Part3） 

　　InregardtoTestorf’sreasonsforincorporatingemergingmarketriskintothevaluationofZuflakbyadjustingcashflowsratherthanadjustingthediscountrate,whichofthefollowingisTRUE?

（） 

　　A.Reasons1and3supportTestorf’scashflowadjustment,butreason2doesnot. 

　　B.AllthreeofthereasonsgivensupportTestorf’scashflowadjustment. 

　　C.Reasons2and3supportTestorf’scashflowadjustment,butreason1doesnot. 

　　D.Reason1supportsTestorf’scashflowadjustment,butreasons2and3donot. 

　　Part4） 

　　Duetothehighinflationrateofthelocalcountry,Testorfcalculatesthereturnoninvestedcapital（ROIC）forKianibyrevaluingthecompany’sfixedassets.IncomparingtheperformanceofZuflaktootherlocalcompanies,theROICcalculationshould:

（） 

　　A.Excludegoodwill. 

　　B.Excludedepreciation. 

　　C.Notrevaluefixedassets. 

　　D.Excludenetoperatingprofitadjustedfortaxes. 

　　Part5） 

　　WithregardtoSolak’snoteconcerningclosedend-countryfunds:

（） 

　　A.Statement1iscorrect,statement2iscorrect. 

　　B.Statement1isincorrect,statement2isincorrect. 

　　C.Statement1iscorrect,statement2isincorrect. 

　　D.Statement1isincorrect,statement2iscorrect. 

　　Explanationsofterms：

（10points） 

　　1.Realinterestrate 

　　2.Windowinstruction 

　　3.Specialdrawingrights 

　　4.Moneymarketmutualfunds 

　　5.Putablebonds 

　　Question3:

PleaselistsomeCapitalMarketInstruments. 

　　Question4:

WhatkindofEconomicPolicyinanOpenEconomy 

　　Question5:

WhatistheModernQuantityTheoryofMoneyDemand?

　　Question6:

Ifyouareapolicymaker,whatareyourUltimateTargetsofMonetaryPolicy?

　1.BCCCB，ABAAD 

　　ReadingComprehension:

（10points） 

　　Part1） 

　　Youranswer:

ThecorrectanswerwasA!

　　BecauseaU.S.denominatedlocalgovernmentbonddoesnotexist,thefollowingformulamustbeusedtocalculatethecountryriskpremium:

　　Localgovernmentbondyield（non–USdollardenominated） 

　　-U.S.10yearT-bondyield 

　　-InflationdifferentialbetweenlocalcountryandU.S. 

　　-YieldspreadbetweencomparablyratedU.S.corporateandU.S.T-bondyields 

　　=CountryRiskPremium 

　　CountryRiskPremium=11.50–4.50–（6.50-3.00）–（7.75-4.50） 

　　=11.50–4.50–3.50–3.25 

　　=0.25 

　　NotethatifaU.S.denominatedlocalgovernmentbonddidexist,wewouldusethatbondinourcalculationandwouldnotincludetheinflationdifferential. 

　　Part2） 

　　Youranswer:

ThecorrectanswerwasA!

　　P0/E1=1/[realrequiredreturn+（1–inflationflow-throughrate）×inflationrate] 

　　=1/[0.05+（1-.65）×0.065] 

　　=1/[0.05+0.02275] 

　　=1/0.07275=13.75 

　　Part3） 

　　Youranswer:

ThecorrectanswerwasA!

　　Althoughemergingmarketriskcanbeincorporatedintothevaluationprocesseitherbyadjustingthediscountrate（requiredreturn）,orbyadjustingcashflowsinascenarioanalysis,evidencesuggeststhatcountryriskscanbebestcapturedthroughcashflowadjustment.Thefourargumentsthatsupportadjustmentstocashflowrathert