金融英语高级考试2009年度FECT现代金融理论与实务考试试题FinancialEnglishCertificateTest(AdvancedEnglishforFinance)ModernFinancialTheoriesandPracticesJune20091.TheexaminationconsistsofTHREEsections.Section1:Answerallthequestions.(20marks)Section2:Answerallthequestions.(40marks)Section3:AnswerONLYTWOoffourquestions.(40marks)2.Alltheanswersshouldbewrittenontheanswersheetsprovided.Theexaminationpapersandanswersheetsmustbesubmittedtotheinvigilatortowardstheendoftheexamination.3.Non-programmableandsilentcalculatorsmaybeused.4.Timeallowed:150minutes.5.Pencilscriptswillnotbeaccepted.SECTIONONE(Total:20marks)Readthefollowingstatementsandchoosethebestanswerbywritingthecorrespondingletteronanswersheetprovided.1.Whichofthefollowingisnotthetheoryofthetermstructureofinterestrates?A.ThePureExpectationTheory.B.TheSegmentedMarketsTheory.C.CambridgeCash-BalanceApproach.D.ThePreferredHabitatandLiquidityPremiumTheory.2.SupposethatAcmeWidgetissuesaone-yeardiscountbondwithafacevalueof$1000,receives$9434andrepays$10000withinoneyear.Theinterestrateonthisbondwouldbe_____A.4.34%B.5.66%C.6%D.10%3.WhichofthefollowingstatementsisCORRECT?A.WhenexpectedU.S.interestrateincreases,theDollar’svaluedepreciates.B.WhenexpectedU.S.tradebarriersincrease,theDollar’svaluedepreciates.C.WhenexpectedU.S.importdemandincreases,theDollar’svaluedepreciates.D.WhenexpectedU.S.productivityincreases,theDollar’svaluedepreciates.4.Itiscalled_____whencommercialbankscan’tmeettheircustomers’demandsforwithdrawalsandloans.A.creditriskB.marketriskC.operationalriskD.liquidityrisk5.Asfarasforeignexchangereserveholdingisconcerned,whichofthefollowingstatementsisINCORRCET?A.Themorevolatiletheexport,thehigherthelevelofreserves.B.Themoreflexibletheexchangerateregime,thehigherthelevelofreserves.C.Thelowertheopportunitycostofholding,thehigherthelevelofreserves.D.Thelargerthesizeofaneconomy,thehigherthelevelofreserves.6.Generallyspeaking,theoperatingtargetsofmonetarypolicyinclude_____A.interestrateandmonetarybaseB.excessreservesandinterestratesC