2012年金融专业英语证书考试FECT模拟试题-4及答案解析.doc

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1、2012 年金融专业英语证书考试 FECT 模拟试题-4 及答案解析(总分：100.00，做题时间：90 分钟)一、SECTION ONE (Compuls(总题数：10，分数：20.00)1.Suppose the demand for tea is very price-elastic. To increase revenue, the tea supplier should _ the price level. （分数：2.00）A.IncreaseB.DecreaseC.Not changeD.Uncertain2.Which of the following would NOT ca

2、use a shift upward of the consumption schedule? () （分数：2.00）A.An increase in household wealth.B.An expectation of rising incomes in the future.C.A reduction in income taxes.D.An increase in household disposable income.3.An increase of $1,000 in bank deposits will: () （分数：2.00）A.Result in a higher le

3、vel of inflation.B.Mean proportionately increased bank profits.C.Facilitate the credit creation process.D.Bring about government intervention in the working of the banking system.4.A rising foreign exchange rate for country X will: () （分数：2.00）A.Result in a rise in Xs RPI.B.Be likely to raise the em

4、ployment level in X.C.Favor those holidaying in X from abroad.D.Ease inflationary pressures with X.5.Cutting taxes can lower investment through its impact on interest rates. This is an example of the: () （分数：2.00）A.Income effect.B.Accelerator effect.C.Crowding out effect.D.Multiplier effect.6.Which

5、one of the following is the most widely used measure of inflation? () （分数：2.00）A.The Consumer Price Index.B.The Index of Leading Economic Indicators.C.The prime rate.D.The Federal Funds rate.7.You have just won the lottery (congratulations!) and are given the option of receiving $2,000,000 now or an

6、 annuity of 200,000 at the end of each year for thirty years. Which of the following is correct? () (assume you are making the decision based on present values) （分数：2.00）A.You cannot choose between the two without first computing future values.B.You will always choose the lump sum regardless of inte

7、rest rates.C.Comparing the future value of each will lead to the same decision as comparing present values.D.You will always choose the annuity.E.You will choose the lump sum if interest rates are 7%.8.A company buys 10 items at a price of 200 each, all on 14 days free credit. It then sells on the n

8、ext day 5 units for 350 each. One item was sold for cash, the remainder on 21 days free credit. What effect do these transactions have on the firms cash flow on the day of the sale? () （分数：2.00）A.Gains 750B.Gains 1,750C.Loses 2,000D.Gains 350.9.A firm has fixed costs of 100,000 per month and variabl

9、e costs of 25 for item. It sells them for 50 each. If it sells 5,000 units each month, what is the firms Margin of Safety? () （分数：2.00）A.1,000 units per monthB.50,000C.1,000 unitsD.25%.10. Fred Perry, CFA, purchased $100,000 of a newly issued Treasury inflation protection security based on the follo

10、wing characteristics and information. （分数：2.00）A.$2,000.B.$2,100.C.$5,000.D.$7,000二、SECTION TWO(Compulso(总题数：1，分数：10.00)Arnold Barker is an analyst at BAYCON Investments. He has been asked to revise BAYCONs credit analysis process for corporate fixed-income securities. This credit analysis process i

11、s the basis for the selection of individual bonds for BAYCONs fixed-income portfolios. Hank Su, Barkers supervisor, comments that one limitation of the current credit analysis process at BAYCON is that it only provides an estimate of a bonds default risk. He asks Barker to expand the credit analysis

12、 process to provide an estimate of a bonds credit spread risk. Su defines credit spread risk as follows: “Credit spread risk is the risk that the issuer will fail to satisfy the terms of the bond with respect to payments.” In addition, Su believes that the current credit analysis process focuses too

13、 much on character, collateral, and covenants, and not enough on capacity. In response to Sus observations, Barker develops a quantitative debt-capacity model to assess the capacity of an issuer to meet its obligations. His debt-capacity model is based on the issuers profitability, debt coverage, an

14、d cash flow analysis. Barker decides to use the model to evaluate Haynes Industries, a recent investment-grade bond issuer. To calculate the inputs to the debt-capacity model, Barker gathered selected financial data, displayed in Exhibit 1, on Haynes Industries. Exhibit 1 Selected Financial Data for

15、 Haynes Industries (In millions) （分数：10.00）(1).Sus definition of credit spread risk is: () （分数：2.00）A.Correct.B.Incorrect, because credit spread risk is the risk that a bonds price will fall when the bonds risk premium increases while the yield on a similar maturity Treasury bond falls.C.Incorrect,

16、because credit spread risk is the risk that a bonds price will fall when the bonds risk premium decreases while the yield on a similar maturity Treasury bond rises.D.Incorrect, because credit spread risk is the risk that a bonds price will fall when the bonds risk premium remains constant while the

17、yield on a similar maturity Treasury bond rises.(2).The “funds from operations / total debt“ ratio for Haynes Industries for 2004 was closest to: () （分数：2.00）A.50.5%.B.52.1%.C.52.1%.D.63.5%.(3).For 2004, compared with 2003, did Haynes Industries have an increase or decrease in: () （分数：2.00）A.Answer

18、A.B.Answer B.C.Answer C.D.Answer D.(4).Given the debt structure described in Dawsons first statement, the factor that is least likely to affect the creditworthiness of the high-yield issuer is the: () （分数：2.00）A.Ability to refinance.B.Impact of sale of assets.C.Presence of senior bonds in the debt s

19、tructure.D.Impact of changes in short-term interest rates.(5).Regarding Dawsons second statement that refers to asset-backed securities is he correct or incorrect in describing the models ability to: () （分数：2.00）A.Answer A.B.Answer BC.Answer CD.Answer D三、Explanations of term(总题数：5，分数：30.00)11.Liquid

20、ity trap （分数：6.00）_12.Recognition lag （分数：6.00）_13.Group of Seven (G-7) （分数：6.00）_14.Municipal bonds （分数：6.00）_15.Grid lock （分数：6.00）_四、Question and Answer(总题数：4，分数：40.00)16.How do the Commercial Banks create the Money? （分数：10.00）_17.What Is Reserve Management and Why Is It Important？ （分数：10.00）_18.

21、Facing with the rapid economic development, what is the Requirement for Financial Globalization? （分数：10.00）_19.What are the Advantages and disadvantages of reserve requirements? （分数：10.00）_2012 年金融专业英语证书考试 FECT 模拟试题-4 答案解析(总分：100.00，做题时间：90 分钟)一、SECTION ONE (Compuls(总题数：10，分数：20.00)1.Suppose the dem

22、and for tea is very price-elastic. To increase revenue, the tea supplier should _ the price level. （分数：2.00）A.IncreaseB.Decrease C.Not changeD.Uncertain解析：2.Which of the following would NOT cause a shift upward of the consumption schedule? () （分数：2.00）A.An increase in household wealth.B.An expectati

23、on of rising incomes in the future.C.A reduction in income taxes.D.An increase in household disposable income. 解析：3.An increase of $1,000 in bank deposits will: () （分数：2.00）A.Result in a higher level of inflation.B.Mean proportionately increased bank profits.C.Facilitate the credit creation process.

24、 D.Bring about government intervention in the working of the banking system.解析：4.A rising foreign exchange rate for country X will: () （分数：2.00）A.Result in a rise in Xs RPI.B.Be likely to raise the employment level in X.C.Favor those holidaying in X from abroad.D.Ease inflationary pressures with X.

25、解析：5.Cutting taxes can lower investment through its impact on interest rates. This is an example of the: () （分数：2.00）A.Income effect.B.Accelerator effect. C.Crowding out effect.D.Multiplier effect.解析：6.Which one of the following is the most widely used measure of inflation? () （分数：2.00）A.The Consume

26、r Price Index. B.The Index of Leading Economic Indicators.C.The prime rate.D.The Federal Funds rate.解析：7.You have just won the lottery (congratulations!) and are given the option of receiving $2,000,000 now or an annuity of 200,000 at the end of each year for thirty years. Which of the following is

27、correct? () (assume you are making the decision based on present values) （分数：2.00）A.You cannot choose between the two without first computing future values.B.You will always choose the lump sum regardless of interest rates.C.Comparing the future value of each will lead to the same decision as compar

28、ing present values. D.You will always choose the annuity.E.You will choose the lump sum if interest rates are 7%.解析：8.A company buys 10 items at a price of 200 each, all on 14 days free credit. It then sells on the next day 5 units for 350 each. One item was sold for cash, the remainder on 21 days f

29、ree credit. What effect do these transactions have on the firms cash flow on the day of the sale? () （分数：2.00）A.Gains 750B.Gains 1,750C.Loses 2,000D.Gains 350. 解析：9.A firm has fixed costs of 100,000 per month and variable costs of 25 for item. It sells them for 50 each. If it sells 5,000 units each

30、month, what is the firms Margin of Safety? () （分数：2.00）A.1,000 units per month B.50,000C.1,000 unitsD.25%.解析：10. Fred Perry, CFA, purchased $100,000 of a newly issued Treasury inflation protection security based on the following characteristics and information. （分数：2.00）A.$2,000.B.$2,100. C.$5,000.D

31、.$7,000解析：二、SECTION TWO(Compulso(总题数：1，分数：10.00)Arnold Barker is an analyst at BAYCON Investments. He has been asked to revise BAYCONs credit analysis process for corporate fixed-income securities. This credit analysis process is the basis for the selection of individual bonds for BAYCONs fixed-inco

32、me portfolios. Hank Su, Barkers supervisor, comments that one limitation of the current credit analysis process at BAYCON is that it only provides an estimate of a bonds default risk. He asks Barker to expand the credit analysis process to provide an estimate of a bonds credit spread risk. Su define

33、s credit spread risk as follows: “Credit spread risk is the risk that the issuer will fail to satisfy the terms of the bond with respect to payments.” In addition, Su believes that the current credit analysis process focuses too much on character, collateral, and covenants, and not enough on capacit

34、y. In response to Sus observations, Barker develops a quantitative debt-capacity model to assess the capacity of an issuer to meet its obligations. His debt-capacity model is based on the issuers profitability, debt coverage, and cash flow analysis. Barker decides to use the model to evaluate Haynes

35、 Industries, a recent investment-grade bond issuer. To calculate the inputs to the debt-capacity model, Barker gathered selected financial data, displayed in Exhibit 1, on Haynes Industries. Exhibit 1 Selected Financial Data for Haynes Industries (In millions) （分数：10.00）(1).Sus definition of credit

36、spread risk is: () （分数：2.00）A.Correct. B.Incorrect, because credit spread risk is the risk that a bonds price will fall when the bonds risk premium increases while the yield on a similar maturity Treasury bond falls.C.Incorrect, because credit spread risk is the risk that a bonds price will fall whe

37、n the bonds risk premium decreases while the yield on a similar maturity Treasury bond rises.D.Incorrect, because credit spread risk is the risk that a bonds price will fall when the bonds risk premium remains constant while the yield on a similar maturity Treasury bond rises.解析：Distinguish among de

38、fault risk, credit spread risk, and downgrade risk. Credit spread risk is the risk an issuers debt obligation will relatively decline due to an increase in the credit spread. In this case the credit spread is increasing and the bonds price will fall. (2).The “funds from operations / total debt“ rati

39、o for Haynes Industries for 2004 was closest to: () （分数：2.00）A.50.5%.B.52.1%.C.52.1%. D.63.5%.解析：Calculate, critique, and interpret the key financial ratios used by credit analysts. Funds from operations / total debt = 7,672 / 14,147 = 54.23%. Funds from operations is defined as (Net Income + Deprec

40、iation therefore the presence of senior bonds in the debt structure will have little impact on the credit analysis of high-yield issuers. (5).Regarding Dawsons second statement that refers to asset-backed securities is he correct or incorrect in describing the models ability to: () （分数：2.00）A.Answer

41、 A.B.Answer BC.Answer C D.Answer D解析：Discuss the factors considered by rating agencies in rating asset-backed securities. In the case of an asset-backed security, the quality of the service is evaluated using factors such as servicing history, underwriting standards for loan origination, servicing c

42、apabilities, business environment, and financial condition. The model will only address financial condition. Dawson is correct in stating that the model cannot be used to determine the ability of the underlying collateral to generate cash flows. 三、Explanations of term(总题数：5，分数：30.00)11.Liquidity tra

43、p （分数：6.00）_正确答案：(As the money supply increases the supply-of-money curve intersects the demand-for-money curve at flat part of the latter where an increase in the money supply no longer reduce the interest rate. This flat portion of the demand-for-money is called liquidity trap, which illustrates t

44、hat the interest rate is insensitive to the increase of the money supply and peoples demand for money becomes infinitely large at the flat portion of the demand-for-money. )解析：12.Recognition lag （分数：6.00）_正确答案：(The recognition lag is the period that elapses between the time at which economic situati

45、on changes and the time at which the policymaking officials become aware of the need for action. This time lag could be negative if the disturbance can be predicted and appropriate policy actions considered before it even occurs. )解析：13.Group of Seven (G-7) （分数：6.00）_正确答案：(Seven of the worlds leading countries that meet periodically to achieve a cooperative effort on international economic and monetary issues。 )解析： 14.Municipal bonds （分数：6.00）_正确答案：(Bond issued by a state, city, or local government. Municipalities issue bonds to rais