单选题 Directions: Read the following passages and determine whether the sentences are "Right" or "Wrong". If there is not enough information to answer " Right" or "Wrong", choose "Doesn't say".{{B}}Passage One{{/B}} When you buy a house, it is likely that you will be able to borrow a large part of the cost from a building society, when the solicitors close the deal. It is usual, however, to put down a deposit of 10% of the cost several weeks earlier when the price is agreed. Banks will often help with bridging loans for this purpose, against the solicitor' s undertaking to repay them on completion of the deal. In the same way banks will often make bridging loans to investors, against the security of their investments, when money is required to pay for the purchase of shares before it is available from the sale of other shares. Banks are not usually keen on making long-term loans in either case, because they prefer not to tie up their resources. They lend money which they have borrowed from depositors, mostly repayable on demand or at short notice, and one of the classic ways for a bank to get into trouble is by borrowing "short" and lending "long".

单选题For what purpose does a bank try to combine a savings account and a checking account?

单选题What does liquidity squeeze mean?

单选题{{B}}Passage Three{{/B}} A credit card is a plastic card (or its equivalent) to be used upon presentation by the cardholder to obtain money, goods, or services, possibly under a line of credit established by the card issuer. The cardholder is billed for any outstanding balance. Credit card customers are given a credit limit on the credit card account and can buy goods and services up to this amount. Normally, banks will set different credit lines to the different groups of cardholders. Every time cardholder uses a credit card for purchasing, he/she must sign a sales slip in the presence of the seller, and the signature is then compared to the signature on the card. Copies of the sales slips have the details of the card and they also show the details and amount of the sale. Each month the cardholder receives a statement from the bank which details all the transactions in the month, together with the total amount outstanding and any minimum amount that needs to be paid. When the full balance is not settled each month, the cardholder is charged a compound interest" (say 0.05% ) on the outstanding balance, and this is supposed to provide the bank with a main source of income (although in China, this revenue is still low because people are reluctant to run into debt). Other two major sources of credit card services are the annual fee from the eardholders and the percentage of the sales revenue as the commission paid by the seller.

单选题Financial markets can be classified as ______.

单选题 Liquidity risk arises from the inability of a bank to accommodate unexpected decreases in {{U}}(21) {{/U}} or to fund increases in {{U}}(22) {{/U}}. When a bank has {{U}}(23) {{/U}} liquidity, it cannot obtain sufficient funds, either by increasing liabilities or by {{U}}(24) {{/U}} assets promptly, at a reasonable cost, thereby affecting profitability. In extreme cases, insufficient liquidity cam lead to the {{U}}(25) {{/U}} of a bank.

单选题A major type of risk that banks face is credit risk or the failure of a counter-party to perform according to a contractual arrangement. This risk applies not only to loans but also to other on-and-off balance sheet exposures such as guarantees, acceptances and securities investments. Serious banking problems have arisen from the failure of banks to recognize impaired assets, to create reserves for writing off these assets, and to suspend recognition of interest income when appropriate.

单选题 Portfolio management is becoming an {{U}}(21) {{/U}} part of the credit process. In the management of their portfolio, commercial banks emphasize the importance of asset and earning {{U}}(22) {{/U}}, the immediate recognition as losses of all credit judged to be {{U}}(23) {{/U}}, and the maintenance of appropriate credit loss {{U}}(24) {{/U}}. All identified losses should be immediately {{U}}(25) {{/U}}

单选题Apart from borrowing from banks, a firm or an individual can obtain funds in a financial market in two ways. The most common method is to issue a debt instrument, such as a bond or a mortgage, which is a contractual agreement by the borrower to pay the holder of the instrument fixed amounts at regular intervals (interest and principal payments) until a specified date (the maturity date), when a final payment is made. The maturity of debt instrument is the time (term) to that instrument"s expiration date. A debt instrument is short - term if its maturity is less than a year and long- term if its maturity is ten years or longer. Debt instruments with a maturity between one and ten years are said to be intermediate- term. The second method of raising funds is by issuing equities, such as common stock, which are claims to share in the net income (income after expenses and taxes) and the assets of a business. If you own one share of common stock in a company that has issued one million shares, you are entitled to one millionth of the firm"s net income and one millionth of the firm"s assets. Equities usually earn periodic payments (dividends) and are considered long - term securities because they have no maturity date. The main disadvantage of owning a corporation"s equities rather than its debt is that an equity holder is a residual claimant; that is, the corporation must pay all its mature debt holders before it pays its equity holder. The advantage of holding equities is that equity holders benefit directly from any increase in the corporation"s profitability or asset value because equities confer ownership rights on the equity holders. Debt holders do not share in this benefit because their dollar payments are fixed.

单选题 Passage 2 Once you own an option, there are three methods that can be used to make a profit or avoid loss : exercise it, offset it with another option, or let it expire worthless. By exercising an option you have purchased, you are choosing to take delivery of (call) or to sell (put) the underlying asset at the option's strike price. Only option buyers have the choice to exercise an option. Option sellers, on the other hand, may experience having an option assigned to an option holder and subsequently exercised. Offsetting is a method of reversing the original transaction to exit the trade. If you bought a call, you have to sell the call with the same strike price and expiration. If you sold a call, you have to buy a call with the same strike price and expiration. If you bought a put, you have to sell a put with the same strike price and expiration. If you sold a put you have to buy a put with the same strike price and expiration. If you do not offset your position, then you have not officially exited the trade. If an option has not been offset or exercised by expiration, the option expires worthless. If you originally sold an option, then you want it to expire worthless because then you get to keep the credit you received from the option premium. Since an option seller wants an option to expire worthless, the passage of time is an option seller's friend and an option buyer's enemy. If you bought an option, the premium is nonrefundable even if you let the option expire worthless. As an option gets closer to expiration, it decreases in value. It is important to note that most options traded on U.S. exchanges are American style options. In essence, they differ from European options in one main way. American style options can be exercised at any time up until expiration. In contrast, European style options can be exercised only on the day they expire. All the options of one type (put or call) which have the same underlying security are called a class of options. For example, all the calls on IBM constitute an option class. All the options that are in one class and have the same strike price are called an option series.

单选题The larger a corporation's taxable income, the closer its average tax rate comes to the higher ______ pate.

单选题{{B}}Passage Three{{/B}} Banks with large international credits limit their concentrations of loans in any one country according to the perceived "country risk". Country risk generally refers to economic and political conditions existing in a country. In any case, a loan to the foreign nation's government or its agencies is generally safer than a loan to a private-sector borrower. Even loans to governments may be unsafe, however, because of what is called "sovereign risk". When foreign governments experience economic or political pressures, there is a risk that they will divert resources to the correction of their domestic problems at the expense of servicing their debts to external lenders. In the 1980s, several less-developed nations requested the rescheduling of bank loans at considerable sacrifice in interest income to the banks involved. At the extreme, governments might simply repudiate their debts; that is, they might no longer recognize their obligations to external creditors.

单选题Directions: In this section, you will hear ten short conversations. At the end of each conversation, a question will be asked about what was said. The conversation and the question will be spoken only once. During the pause, you must read the four choices marked A, B, C, D, and decide which is the best answer. Then mark the corresponding letter on the ANSWER SHEET with a single line through the center.

单选题Consumer Credits are high risk and high interest credit products, which are usually classified into three sorts: amortization loan, credit card and non- installment loan for purchasing cars or non - structure houses or investing a little amount and so on. Their maturity usually range from two to five years. Education loan is just one type of amortization loans. Credit card, first issued by Franklin National Bank in 1952, is a kind of revolving loan, and is getting more and more popular. Non - installment loan is a kind of short - term loan to meet temporary need and is supposed to pay back at one rime. It is also called bridge loan. Commercial banks provide long- term Mortgage Loans to borrowers (consumers) to purchase homes/land. The ownership of the property remains in mortgagees and the possession of property usually remains in mortgagors mdess and until the occurrence of default or full repayment. Maturity of such loans is usually 30 years and the interest rates are fixed. Maximum amount of such loans is 70% of the property value, and the balance shouhl be paid in cash as down payment. A home mortgage plan is much more than a mortgage loan. It has additional benefits. For example, the loan remount is up to 85% of borrower"s property value, and repayment periods are up to 30 years. Repayment schemes include straight line repayment schemes, reducing balance repayment schemes, step- up repayment schemes, and fortnightly repayment option. Other financial services include home owner"s overdraft, up to HK $ 400,000 decoration loan as much as HK $ 400,000 with a repayment period of up to three years. Bridging Loan, which will help borrowers to complete the purchase of the new property before borrowers" receipt of safe proceeds from borrowers" existing property, equity Loan, up to HK $ 2,000,000 for use as a deposit for a new house, or for other personal financial needs exclusive preferential interest rate.

单选题______ is a large loan, generally more than USD10 million, negotiated between a borrower and a single bank, but actually funded by a number of banks. A. A project loan B. A syndicated loan C. An export credit D. Consumer credit

单选题Which one is not included in the financial statement footnote? (a)changes in accounting estimates. (b)accounting methods used in preparing the financial statement. (c)contingent liabilities can not be, reasonably estimated. (d)debtors which happened before the balance sheet date are collected between the balance sheet date and the issue of statement for that year.

单选题Retained Earnings is most appropriately classified as ______. (a)a fixed asset (b)an intangible asset (c)shareholder's equity (d)a fictitious Iiability

单选题Sam Company Ltd. produces a range of products and absorbs production overhead using a rate of 168% on direct wages. The absorption rate was calculated from following budgeted figures: ＄ Direct wages 100,000 Fixed production overhead 90,000 Variable production overhead 78,000 Sam is making component W, which is an essential part of product M. The cost of making component W is as follows: ＄ Raw material 10 Direct wages 8 Production overhead 18 36 It is found that component W could be bought from an outside supplier at ＄21. It is unlikely to reduce any production costs even if component W is acquired from outside. Required: (a)Determine the overhead absorption rate. (b)Advise whether the company should continue making component W or buy it from outside.

单选题A cheque payable to ABC Company is credited to the personal account of Mr. Gao. The bank ______.

单选题A documentary collection can be defined as the collection of a sum due from a buyer by a bank ______ against delivery of certain documents.