财务管理基础英文版选择题

CHAPTER 1GLOBALIZATION AND THE MULTINATIONAL FIRMSUGGESTED ANSWERS TO END—OF-CHAPTER QUESTIONS QUESTIONS1 。

Why is it important to study international financial management？Answer: We are now living in a world where all the major economic functions, i.e.，consumption，production, and investment，are highly globalized. It is thus essential for financial managers to fully understand vital international dimensions of financial management. This global shift is in marked contrast to a situation that existed when the authors of this book were learning finance some twenty years ago. At that time, most professors customarily (and safely, to some extent) ignored international aspects of finance 。

This mode of operation has become untenable since then.2. How is international financial management different from domestic financial management？Answer ：There are three major dimensions that set apart international finance from domestic finance 。

财务英语试题及答案一、选择题（每题2分，共20分）1. What is the term for the process of recording, summarizing, and reporting financial transactions?A. BudgetingB. AccountingC. AuditingD. Forecasting答案：B2. Which of the following is a financial statement that showsa company's financial position at a specific point in time?A. Income StatementB. Balance SheetC. Cash Flow StatementD. Statement of Retained Earnings答案：B3. The difference between the purchase price and the fair market value of an asset is known as:A. DepreciationB. AmortizationC. GoodwillD. Capital Gains答案：C4. What is the term for the systematic allocation of the cost of a tangible asset over its useful life?A. DepreciationB. AmortizationC. AccrualD. Provision答案：A5. Which of the following is not a type of revenue recognition?A. Cash basisB. Accrual basisC. Installment methodD. All of the above答案：D6. The process of estimating the cost of completing a project is known as:A. BudgetingB. Cost estimationC. Project managementD. Cost accounting答案：B7. Which of the following is a non-current liability?A. Accounts payableB. Wages payableC. Long-term debtD. Income tax payable答案：C8. The term used to describe the process of adjusting the accounts at the end of an accounting period is:A. Closing the booksB. JournalizingC. PostingD. Adjusting entries答案：D9. What is the term for the financial statement that shows the changes in equity of a company over a period of time?A. Balance SheetB. Income StatementC. Statement of Changes in EquityD. Cash Flow Statement答案：C10. The process of verifying the accuracy of financial records is known as:A. BudgetingB. AuditingC. ForecastingD. Valuation答案：B二、填空题（每空1分，共10分）1. The __________ is the process of determining the value of an asset or liability.答案：valuation2. A __________ is a type of financial instrument that represents a creditor's claim on a company's assets.答案：bond3. The __________ is the difference between the cost of an asset and its depreciation.答案：book value4. __________ is the process of converting non-cash items into cash equivalents.答案：Liquidation5. A __________ is a financial statement that provides information about a company's cash inflows and outflows during a specific period.答案：Cash Flow Statement6. The __________ is the process of estimating the useful life of an asset.答案：depreciation schedule7. __________ is the practice of recording revenues and expenses when they are earned or incurred, not when cash is received or paid.答案：Accrual accounting8. __________ is the process of recording transactions in the order they are received.答案：Journalizing9. __________ is the practice of matching expenses with the revenues they helped to generate.答案：Matching principle10. A __________ is a document that provides evidence of a transaction.答案：voucher三、简答题（每题5分，共20分）1. What are the main components of a balance sheet?答案：The main components of a balance sheet are assets, liabilities, and equity.2. Explain the concept of "double-entry bookkeeping."答案：Double-entry bookkeeping is a system of recording financial transactions in which every entry to an account requires a corresponding and opposite entry to another account, ensuring that the total of debits equals the total of credits.3. What is the purpose of an income statement?答案：The purpose of an income statement is to summarize a company's revenues, expenses, and profits or losses over a specific period of time.4. Describe the role of a financial controller in anorganization.答案：A financial controller is responsible for overseeing the financial operations of an organization, including budgeting, financial reporting, and ensuring compliance with financial regulations and policies.四、论述题（每题15分，共30分）1. Discuss the importance of financial planning in business management.答案：Financial planning is crucial in business management as it helps in setting financial goals。

第一章1 CORRECTWhich of the following are microeconomic variables that help define and explain the discipline of finance? DA) risk and returnB) capital structureC) inflationD) all of the aboveFeedback: All of the above are relevant in explaining finance.2 CORRECTOne primary macroeconomic variable that helps define and explain the discipline of finance? CA) capital structureB) inflationC) technologyD) riskFeedback: Technology is very important in explaining the field of finance.3 CORRECTThe money markets deal with _________. BA) securities with a life of more than one yearB) short-term securitiesC) securities such as common stockD) none of the aboveFeedback: The money markets are concerned with short-term securities, those with a life less than one year.4 CORRECTThe ability of a firm to convert an asset to cash is called ___A_________.A) liquidityB) solvencyC) returnD) marketabilityFeedback: Liquidity also means how close an asset is to cash.5 CORRECTEarly in the history of finance, an important issue was: AA) liquidityB) technologyC) capital structureD) financing optionsFeedback: Maintaining liquidity was a major concern historically.6 INCORRECTThe __________C_________ is the most common form of business organization in the U.S.A) corporationB) partnershipC) sole proprietorshipD) none of the aboveFeedback: There are more sole proprietorships than any other form of business organization.7 CORRECTThe _________C___________ has more sales in dollars than any other form of business organization.A) sole proprietorshipB) partnershipC) corporationD) none of the aboveFeedback: The corporation is the most important in terms of dollars.8 CORRECTOne major disadvantage of the sole proprietorship is _____B___________.A) simplicity of decision-makingB) unlimited liabilityC) low operational costsD) none of the aboveFeedback: The owners of a sole proprietorship are personally liable.9 CORRECTThe appropriate firm goal in a capitalist society is ______B__________.A) profit maximizationB) shareholder wealth maximizationC) social responsibilityD) none of the aboveFeedback: The goal is to maximize the wealth of shareholders.10 CORRECTThe agency problem will occur in a business firm if the goals of ______C______ and shareholders do not agree.A) investorsB) the publicC) managementD) none of the above第二章Feedback: The goals of management may be different from those of shareholders.The accounting statements that a firm is required to file include all but one of these. BA) Balance SheetB) Statement of Accounts ReceivableC) Income StatementD) Statement of Cash FlowsFeedback: The required statements include the income statement, balance sheet and statement of changes in cash flows. The statement of changes in owners equity (or retained earnings) is also required by Generally Accepted Accounting Principles but is not covered in this text.2 CORRECTThe _______A________ shows the firm's operating results over a period of time.A) Income StatementB) Statement of Cash FlowsC) Balance SheetD) None of the aboveFeedback: The Income Statement represents a moving picture of a firm's revenues and expenses.3 CORRECTAll of the following except one are tax-deductible expenses. CA) interest expenseB) depreciationC) common stock dividendsD) income taxesFeedback: Common stock dividends are not tax deductible to a firm.4 CORRECTAll of the following are non-operating expenses except ______B_______.A) interest expenseB) cost of goods soldC) preferred stock dividendsD) taxesFeedback: The cost of goods sold is an operating expense.5 CORRECTBondholders receive _____C________ from the business firm.A) preferred dividend paymentsB) common stock paymentsC) interest paymentsD) royaltiesFeedback: Bondholders are typically paid interest semi-annually.6 CORRECTThe ratio of net income to common shares outstanding is called _____B_________.A) price/earnings ratioB) earnings per shareC) dividends per shareD) none of the aboveFeedback: This is called the earnings per share (EPS).7 CORRECTUsually, firms with high price/earnings ratios are _____A_______ firms.A) growthB) decliningC) matureD) none of the aboveFeedback: A high p/e ratio indicates a firm with strong growth prospects8 CORRECTOne of the limitations of the _____C_______ is that it is based on historical costs.A) income statementB) statement of cash flowsC) balance sheetD) none of the aboveFeedback: The balance sheet uses historical costs.9 INCORRECTA source of funds is a: DA) decrease in a current assetB) decrease in a current liabilityC) increase in a current liabilityD) a and c aboveFeedback: A decrease in current assets is equivalent to an increase in current liabilities.10 INCORRECTShort-term financing for a business firm includes: BA) bondsB) accounts payableC) stockholder's equityD) mortgagesFeedback: The other three answers represent long-term financing.第三章Trend analysis allows a firm to compare its performance to: DA) other firms in the industryB) other time periods within the firmC) other industriesD) all of the aboveFeedback: Trend analysis gives an analyst a long-term perspective. As a security analyst and a portfolio manager with Oppenheimer Capital, Dick Glasebrook spoke to a Senior Finance Managers’ Meeting at the Boeing Company on May 4, 1999. He said it is one thing to compare afirm’s performan ce against competitors within the same industry. But investors are not limited to specific industries. In fact, investors seek to diversify their investments across many different industries. So management should also compare performance to any well run company--both in and outside of their industry.2Ratio analysis allows a firm to compare its performance to: DA) other firms in the industryB) other time periods within the firmC) other industriesD) all of the aboveFeedback: Trend analysis gives an analyst a long-term perspective. As a security analyst and a portfolio manager with Oppenheimer Capital, Dick Glasebrook spoke to a Senior Finance Managers’ Meeting at the Boeing Company on May 4, 1999. He said it is one thing to compare a firm’s performance against competitors within the same industry. But investors are not limited to specific industries. In fact, investors seek to diversify their investments across many different industries. So management should also compare performance to any well run company--both in and outside of their industry.3Usually, a firm's suppliers are most interested in its ___D_____ ratios.A) profitabilityB) debtC) asset utilizationD) liquidityFeedback: The suppliers are most interested in getting paid, as shown by the liquidity of the firm.4 CORRECT__________D_____ would be most interested in a firm's debt utilization ratios.A) bondholdersB) stockholdersC) short-term creditorsD) Both A and BFeedback: Debt is indicated by a firm issuing bonds but is also a function of the debt to equity relationship or the degree of financial leverage. Both bond holders and stockholders are interested in this relationship although frof opposing viewpoints.5 CORRECTThe _______C______ ratio indicates the return firm shareholders are earning.A) return on assetsB) return on investmentC) return on equityD) net profit marginFeedback: The shareholders represent equity, or ownership in the firm.6 CORRECTWhich of the following is an example of a profitability ratio? CA) Quick ratioB) Average collection periodC) Return on equityD) Times interest earnedFeedback: This is the only profitability ratio that is listed. All profitability ratios have net income in the denominator.7Total asset turnover will indicate if there is a problem with the ___C______ ratio.A) debt to assetsB) times interest earnedC) fixed asset turnoverD) currentFeedback: Fixed asset turnover is part of total asset turnover.8 CORRECTAll of the following are asset utilization ratios except: DA) average collection periodB) inventory turnoverC) receivables turnoverD) return on assetsFeedback: Return on assets is a profitability ratio. Any ratio with net income in the denominator is a profitability ratio.9 CORRECTIf a firm's debt ratio is 55%, this means ____C__ of the firm's assets are financed by equity financing.A) 55%B) 50%C) 45%D) not enough information to answer questionFeedback: The equity portion plus the debt portion must add up to 100%.10 CORRECTAll of the following can present problems for ratio analysis except: DA) inflationB) inventory accounting methodsC) disinflationD) all of the aboveFeedback: These all may cause problems.第四章。

会计英语试题及答案一、选择题（每题2分，共20分）1. Which of the following is not a basic accounting element?A. AssetsB. LiabilitiesB. RevenuesD. Equity答案：C2. The accounting equation can be expressed as:A. Assets = Liabilities + EquityB. Assets + Liabilities = EquityC. Assets - Liabilities = EquityD. Liabilities - Equity = Assets答案：A3. What does the term "Double Entry Bookkeeping" refer to?A. Recording transactions in two accountsB. Recording transactions in two different currenciesC. Recording transactions in two different formatsD. Recording transactions in two different books答案：A4. Which of the following is not a type of adjusting entry?A. AccrualB. PrepaymentC. DepreciationD. Amortization答案：B5. The purpose of closing entries is to:A. Prepare financial statementsB. Adjust for accruals and deferralsC. Record the sale of inventoryD. Record the purchase of fixed assets答案：A6. Which of the following is a measure of a company's liquidity?A. Return on Investment (ROI)B. Debt to Equity RatioC. Current RatioD. Profit Margin答案：C7. The term "Depreciation" refers to:A. The decrease in value of an asset over timeB. The increase in value of an asset over timeC. The amount of an asset that is used upD. The process of selling an asset答案：A8. What is the purpose of a trial balance?A. To calculate net incomeB. To check the accuracy of accounting recordsC. To determine the value of assetsD. To calculate the cost of goods sold答案：B9. Which of the following is not a financial statement?A. Balance SheetB. Income StatementC. Cash Flow StatementD. Budget答案：D10. The accounting principle that requires expenses to be recorded in the same period as the revenues they generate is known as:A. Going ConcernB. Matching PrincipleC. Historical Cost PrincipleD. Materiality答案：B二、填空题（每题2分，共20分）1. The __________ is the process of recording financial transactions in a systematic way.答案：Journalizing2. The __________ is a summary of the financial transactionsof a business during a specific period.答案：Ledger3. __________ is the accounting principle that requires all accounting information to be based on historical cost.答案：Historical Cost Principle4. The __________ is a financial statement that shows a company's financial position at a specific point in time.答案：Balance Sheet5. __________ is the process of estimating revenues and expenses for a future period.答案：Budgeting6. __________ is the accounting principle that requires all transactions to be recorded in the period in which they occur.答案：Accrual Basis Accounting7. The __________ is a financial statement that shows the results of a company's operations over a period of time.答案：Income Statement8. __________ is the process of determining the value of a company's assets and liabilities.答案：Valuation9. __________ is the accounting principle that requires alltransactions to be recorded in the order in which they occur.答案：Chronological Order10. The __________ is a financial statement that shows the sources and uses of cash during a period of time.答案：Cash Flow Statement三、简答题（每题15分，共30分）1. 描述会计信息的质量特征有哪些，并简要解释它们的含义。

CHAPTER 5 THE MARKET FOR FOREIGN EXCHANGESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Give a full definition of the market for foreign exchange.Answer: Broadly defined, the foreign exchange (FX) market encompasses the conversion of purchasing power from one currency into another, bank deposits of foreign currency, the extension of credit denominated in a foreign currency, foreign trade financing, and trading in foreign currency options and futures contracts.2. What is the difference between the retail or client market and the wholesale or interbank market for foreign exchange?Answer: The market for foreign exchange can be viewed as a two-tier market. One tier is the wholesale or interbank market and the other tier is the retail or client market. International banks provide the core of the FX market. They stand willing to buy or sell foreign currency for their own account. These international banks serve their retail clients, corporations or individuals, in conducting foreign commerce or making international investment in financial assets that requires foreign exchange. Retail transactions account for only about 14 percent of FX trades. The other 86 percent is interbank trades between international banks, or non-bank dealers large enough to transact in the interbank market.3. Who are the market participants in the foreign exchange market?Answer: The market participants that comprise the FX market can be categorized into five groups: international banks, bank customers, non-bank dealers, FX brokers, and central banks. International banks provide the core of the FX market. Approximately 100 to 200 banks worldwide make a market in foreign exchange, i.e., they stand willing to buy or sell foreign currency for their own account. These international banks serve their retail clients, the bank customers, in conducting foreign commerce or making international investment in financial assets that requires foreign exchange. Non-bank dealers are large non-bank financial institutions, such as investment banks, mutual funds, pension funds, and hedge funds, whose size and frequency of trades make it cost- effective to establish their own dealing rooms to trade directly in the interbank market for their foreign exchange needs.Most interbank trades are speculative or arbitrage transactions where market participants attempt to correctly judge the future direction of price movements in one currency versus another or attempt to profit from temporary price discrepancies in currencies between competing dealers.FX brokers match dealer orders to buy and sell currencies for a fee, but do not take a position themselves. Interbank traders use a broker primarily to disseminate as quickly as possible a currency quote to many other dealers.Central banks sometimes intervene in the foreign exchange market in an attempt to influence the price of its currency against that of a major trading partner, or a country that it “fixes” or “pegs” its currency against. Intervention is the process of using foreign currency reser ves to buy one’s own currency in order to decrease its supply and thus increase its value in the foreign exchange market, or alternatively, selling one’s own currency for foreign currency in order to increase its supply and lower its price.4. How are foreign exchange transactions between international banks settled?Answer: The interbank market is a network of correspondent banking relationships, with large commercial banks maintaining demand deposit accounts with one another, called correspondent bank accounts. The correspondent bank account network allows for the efficient functioning of the foreign exchange market. As an example of how the network of correspondent bank accounts facilities international foreign exchange transactions, consider a U.S. importer desiring to purchase merchandise invoiced in guilders from a Dutch exporter. The U.S. importer will contact his bank and inquire about the exchange rate. If the U.S. importer accepts the offered exchange rate, the bank will debit the U.S. importer’s account for the purchase of the Dutch guilders. The bank will instruct its correspondent bank in the Netherlands to debit its correspondent bank account the appropriate amount of guilders and to credit the Dutch exporter’s bank account. The importer’s bank will then debit its books to offset the debit of U.S. importer’s account, reflecting the decrease in its correspondent bank account balan ce.5. What is meant by a currency trading at a discount or at a premium in the forward market?Answer: The forward market involves contracting today for the future purchase or sale of foreign exchange. The forward price may be the same as the spot price, but usually it is higher (at a premium) or lower (at a discount) than the spot price.6. Why does most interbank currency trading worldwide involve the U.S. dollar?Answer: Trading in currencies worldwide is against a common currency that has international appeal. That currency has been the U.S. dollar since the end of World War II. However, the euro and Japanese yen have started to be used much more as international currencies in recent years. More importantly, trading would be exceedingly cumbersome and difficult to manage if each trader made a market against all other currencies.7. Banks find it necessary to accommodate their clients’ needs to buy or sell FX forward, in many instances for hedging purposes. How can the bank eliminate the currency exposure it has created for itself by accommodating a client’s forward transaction?Answer: Swap transactions provide a means for the bank to mitigate the currency exposure in a forward trade. A swap transaction is the simultaneous sale (or purchase) of spot foreign exchange against a forward purchase (or sale) of an approximately equal amount of the foreign currency. To illustrate, suppose a bank customer wants to buy dollars three months forward against British pound sterling. The bank can handle this trade for its customer and simultaneously neutralize the exchange rate risk in the trade by selling (borrowed) British pound sterling spot against dollars. The bank will lend the dollars for three months until they are needed to deliver against the dollars it has sold forward. The British pounds received will be used to liquidate the sterling loan.8. A CD/$ bank trader is currently quoting a small figure bid-ask of 35-40, when the rest of the market is trading at CD1.3436-CD1.3441. What is implied about the trader’s beliefs by his prices?Answer: The trader must think the Canadian dollar is going to appreciate against the U.S. dollar and therefore he is trying to increase his inventory of Canadian dollars by discouraging purchases of U.S. dollars by standing willing to buy $ at only CD1.3435/$1.00 and offering to sell from inventory at the slightly lower than market price of CD1.3440/$1.00.9. What is triangular arbitrage? What is a condition that will give rise to a triangular arbitrage opportunity?Answer: Triangular arbitrage is the process of trading out of the U.S. dollar into a second currency, then trading it for a third currency, which is in turn traded for U.S. dollars. The purpose is to earn anarbitrage profit via trading from the second to the third currency when the direct exchange between the two is not in alignment with the cross exchange rate.Most, but not all, currency transactions go through the dollar. Certain banks specialize in making a direct market between non-dollar currencies, pricing at a narrower bid-ask spread than the cross-rate spread. Nevertheless, the implied cross-rate bid-ask quotations impose a discipline on the non-dollar market makers. If their direct quotes are not consistent with the cross exchange rates, a triangular arbitrage profit is possible.PROBLEMS1. Using Exhibit 5.4, calculate a cross-rate matrix for the euro, Swiss franc, Japanese yen, and the British pound. Use the most current American term quotes to calculate the cross-rates so that the triangular matrix resulting is similar to the portion above the diagonal in Exhibit 5.6.Solution: The cross-rate formula we want to use is:S(j/k) = S($/k)/S($/j).The triangular matrix will contain 4 x (4 + 1)/2 = 10 elements.¥SF £$Euro 138.05 1.5481 .6873 1.3112 Japan (100) 1.1214 .4979 .9498 Switzerland .4440 .8470U.K 1.90772. Using Exhibit 5.4, calculate the one-, three-, and six-month forward cross-exchange rates between the Canadian dollar and the Swiss franc using the most current quotations. State the forward cross-rates in “Canadian” terms.Solution: The formulas we want to use are:F N(CD/SF) = F N($/SF)/F N($/CD)orF N(CD/SF) = F N(CD/$)/F N(SF/$).We will use the top formula that uses American term forward exchange rates.F1(CD/SF) = .8485/.8037 = 1.0557F3(CD/SF)= .8517/.8043 = 1.0589F6(CD/SF)= .8573/.8057 = 1.06403. Restate the following one-, three-, and six-month outright forward European term bid-ask quotes in forward points.Spot 1.3431-1.3436One-Month 1.3432-1.3442Three-Month 1.3448-1.3463Six-Month 1.3488-1.3508Solution:One-Month 01-06Three-Month 17-27Six-Month 57-724. Using the spot and outright forward quotes in problem 3, determine the corresponding bid-ask spreads in points.Solution:Spot 5One-Month 10Three-Month 15Six-Month 205. Using Exhibit 5.4, calculate the one-, three-, and six-month forward premium or discount for the Canadian dollar versus the U.S. dollar using American term quotations. For simplicity, assume each month has 30 days. What is the interpretation of your results?Solution: The formula we want to use is:f N,CD= [(F N($/CD) - S($/CD/$)/S($/CD)] x 360/Nf1,CD= [(.8037 - .8037)/.8037] x 360/30 = .0000f3,CD= [(.8043 - .8037)/.8037] x 360/90 = .0030f6,CD= [(.8057 - .8037)/.8037] x 360/180 = .0050The pattern of forward premiums indicates that the Canadian dollar is trading at an increasing premium versus the U.S. dollar. That is, it becomes more expensive (in both absolute and percentage terms) to buy a Canadian dollar forward for U.S. dollars the further into the future one contracts.6. Using Exhibit 5.4, calculate the one-, three-, and six-month forward premium or discount for the U.S. dollar versus the British pound using European term quotations. For simplicity, assume each month has 30 days. What is the interpretation of your results?Solution: The formula we want to use is:f N,$= [(F N (£/$) - S(£/$))/S(£/$)] x 360/Nf1,$= [(.5251 - .5242)/.5242] x 360/30 = -.0023f3,$= [(.5268 - .5242)/.5242] x 360/90 = -.0198f6,$= [(.5290 - .5242)/.5242] x 360/180 = -.0183The pattern of forward premiums indicates that the British pound is trading at a discount versus the U.S. dollar. That is, it becomes more expensive to buy a U.S. dollar forward for British pounds (in absolute but not percentage terms) the further into the future one contracts.7. Given the following information, what are the NZD/SGD currency against currency bid-ask quotations?American Terms European TermsBank Quotations Bid Ask Bid AskNew Zealand dollar .7265 .7272 1.3751 1.3765Singapore dollar .6135 .6140 1.6287 1.6300Solution: Equation 5.12 from the text implies S b(NZD/SGD) = S b($/SGD) x S b(NZD/$) = .6135 x 1.3765 = .8445. The reciprocal, 1/S b(NZD/SGD)= S a(SGD/NZD)= 1.1841. Analogously, it is implied that S a(NZD/SGD) = S a($/SGD) x S a(NZD/$) = .6140 x 1.3765 = .8452. The reciprocal, 1/S a(NZD/SGD) = S b(SGD/NZD)= 1.1832. Thus, the NZD/SGD bid-ask spread is NZD0.8445-NZD0.8452 and the SGD/NZD spread is SGD1.1832-SGD1.1841.8. Assume you are a trader with Deutsche Bank. From the quote screen on your computer terminal, you notice that Dresdner Bank is quoting €0.7627/$1.00 and Credit Suisse is offering SF1.1806/$1.00. You learn that UBS is making a direct market between the Swiss franc and the euro, with a current €/SF quote of .6395. Show how you can make a triangular arbitrage profit by trading at these prices. (Ignore bid-ask spreads for this problem.) Assume you have $5,000,000 with which to conduct the arbitrage. What happens if you initially sell dollars for Swiss francs? What €/SF price will eliminate triangular arbitrage?Solution: To make a triangular arbitrage profit the Deutsche Bank trader would sell $5,000,000 to Dresdner Bank at €0.7627/$1.00. This trade would yield €3,813,500= $5,000,000 x .7627. The Deutsche Bank trader would then sell the euros for Swiss francs to Union Bank of Switzerland at a price of €0.6395/SF1.00, yielding SF5,963,253 = €3,813,500/.6395. The Deutsche Bank trader will resell the Swiss francs to Credit Suisse for $5,051,036 = SF5,963,253/1.1806, yielding a triangular arbitrage profit of $51,036.If the Deutsche Bank trader initially sold $5,000,000 for Swiss francs, instead of euros, the trade would yield SF5,903,000 = $5,000,000 x 1.1806. The Swiss francs would in turn be traded for euros to UBS for €3,774,969= SF5,903,000 x .6395. The euros would be resold to Dresdner Bank for $4,949,481 = €3,774,969/.7627, or a loss of $50,519. Thus, it is necessary to conduct the triangular arbitrage in the correct order.The S(€/SF)cross exchange rate should be .7627/1.1806 = .6460. This is an equilibrium rate at which a triangular arbitrage profit will not exist. (The student can determine this for himself.) A profit results from the triangular arbitrage when dollars are first sold for euros because Swiss francs are purchased for euros at too low a rate in comparison to the equilibrium cross-rate, i.e., Swiss francs are purchased for only €0.6395/SF1.00 instead of the no-arbitrage rate of €0.6460/SF1.00. Similarly, when dollars are first sold for Swiss francs, an arbitrage loss results because Swiss francs are sold for euros at too low a rate, resulting in too few euros. That is, each Swiss franc is sold for €0.6395/SF1.00 instead of the higher no-arbitrage rate of €0.6460/SF1.00.9. The current spot exchange rate is $1.95/£ and the three-month forward rate is $1.90/£. Based on your analysis of the exchange rate, you are pretty confident that the spot exchange rate will be $1.92/£ in three months. Assume that you would like to buy or sell £1,000,000.a. What actions do you need to take to speculate in the forward market? What is the expected dollar profit from speculation?b. What would be your speculative profit in dollar terms if the spot exchange rate actually turns out to be $1.86/£.Solution:a. If you believe the spot exchange rate will be $1.92/£ in three months, you should buy £1,000,000 forward for $1.90/£. Your expected profit will be:$20,000 = £1,000,000 x ($1.92 -$1.90).b. If the spot exchange rate actually turns out to be $1.86/£ in three months, your loss from the long position will be:-$40,000 = £1,000,000 x ($1.86 -$1.90).10. Omni Advisors, an international pension fund manager, plans to sell equities denominated in Swiss Francs (CHF) and purchase an equivalent amount of equities denominated in South African Rands (ZAR).Omni will realize net proceeds of 3 million CHF at the end of 30 days and wants to eliminate the risk that the ZAR will appreciate relative to the CHF during this 30-day period. The following exhibit shows current exchange rates between the ZAR, CHF, and the U.S. dollar (USD).Currency Exchange Ratesa.Describe the currency transaction that Omni should undertake to eliminate currency riskover the 30-day period.b.Calculate the following:• The CHF/ZAR cross-currency rate Omni would use in valuing the Swiss equityportfolio.•The current value of Omni’s Swiss equity portfolio in ZAR.• The annualized forward premium or discount at which the ZAR is trading versus theCHF.CFA Guideline Answer:a.To eliminate the currency risk arising from the possibility that ZAR will appreciateagainst the CHF over the next 30-day period, Omni should sell 30-day forward CHFagainst 30-day forward ZAR delivery (sell 30-day forward CHF against USD and buy30-day forward ZAR against USD).b.The calculations are as follows:•Using the currency cross rates of two forward foreign currencies and three currencies (CHF, ZAR, USD), the exchange would be as follows:--30 day forward CHF are sold for USD. Dollars are bought at the forward sellingprice of CHF1.5285 = $1 (done at ask side because going from currency into dollars)--30 day forward ZAR are purchased for USD. Dollars are simultaneously sold to purchase ZAR at the rate of 6.2538 = $1 (done at the bid side because going fromdollars into currency)--For every 1.5285 CHF held, 6.2538 ZAR are received; thus the cross currency rate is1.5285 CHF/6.2538 ZAR = 0.244411398.• At the time of execution of the forward contracts, the v alue of the 3 million CHF equity portfolio would be 3,000,000 CHF/0.244411398 = 12,274,386.65 ZAR.• To calculate the annualized premium or discount of the ZAR against the CHF requires comparison of the spot selling exchange rate to the forward selling price of CHF for ZAR.Spot rate = 1.5343 CHF/6.2681 ZAR = 0.24477912030 day forward ask rate 1.5285 CHF/6.2538 ZAR = 0.244411398The premium/discount formula is:[(forward rate – spot rate) / spot rate] x (360 / # day contract) =[(0.244411398 – 0.24477912) / 0.24477912] x (360 / 30) =-1.8027126 % = -1.80% discount ZAR to CHFMINI CASE: SHREWSBURY HERBAL PRODUCTS, LTD.Shrewsbury Herbal Products, located in central England close to the Welsh border, is an old-line producer of herbal teas, seasonings, and medicines. Its products are marketed all over the United Kingdom and in many parts of continental Europe as well.Shrewsbury Herbal generally invoices in British pound sterling when it sells to foreign customers in order to guard against adverse exchange rate changes. Nevertheless, it has just received an order from a large wholesaler in central France for £320,000 of its products, conditional upon delivery being made in three months’ time and the order invoiced in euros.Shrewsbury’s controller, Elton Peters, is concerned with whether the pound will appreciate versus the euro over the next three months, thus eliminating all or most of the profit when the euro receivable is paid. He thinks this is an unlikely possibility, but he decides to contact the firm’s banker for suggestions about hedging the exchange rate exposure.Mr. Peters learns from the banker that the current spot e xchange rate is €/£ is €1.4537, thus the invoice amount should be €465,184. Mr. Peters also learns that the three-month forward rates for the pound and the euro versus the U.S. dollar are $1.8990/£1.00 and $1.3154/€1.00, respectively. The banker offers to set up a forward hedge for selling the euro receivable for pound sterling based on the €/£ forward cross-exchange rate implicit in the forward rates against the dollar.What would you do if you were Mr. Peters?Suggested Solution to Shrewsbury Herbal Products, Ltd.Note to Instructor: This elementary case provides an intuitive look at hedging exchange rate exposure. Students should not have difficulty with it even though hedging will not be formally discussed until Chapter 8. The case is consistent with the discussion that accompanies Exhibit 5.9 of the text. Professor of Finance, Banikanta Mishra, of Xavier Institute of Management – Bhubaneswar, India contributed to this solution.Suppose Shrewsbury sells at a twenty percent markup. Thus the cost to the firm of the £320,000 order is £256,000. Thus, the pound could appreciate to €465,184/£256,000 = €1.8171/1.00 before all profit was eliminated. This seems rather unlikely. Nevertheless, a ten percent appreciation of the pound (€1.4537 x 1.10) to €1.5991/£1.00 would only yield a profit of £34,904 (= €465,184/1.5991 - £256,000). Shrewsbury can hedge the exposure by selling the euros forward for British pounds at F3(€/£) = F3($/£) ÷ F3($/€) = 1.8990 ÷ 1.3154 = 1.4437. At this forward exchange rate, Shrewsbury can “lock-in” a price of £322,217 (= €465,184/1.4437) for the sale. The forward exchange rate indicates that the euro is trading at a premium to the British pound in the forward market. Thus, the forward hedge allows Shrewsbury to lock-in a greater amount (£2,217) than if the euro receivable was converted into pounds at the current spotIf the euro was trading at a forward discount, Shrewsbury would end up locking-in an amount less than £320,000. Whether that would lead to a loss for the company would depend upon the extent of the discount and the amount of profit built into the price of £320,000. Only if the forward exchange rate is even with the spot rate will Shrewsbury receive exactly £320,000.Obviously, Shrewsbury could ensure that it receives exactly £320,000 at the end of three-month accounts receivable period if it could invoice in £. That, however, is not acceptable to the French wholesaler. When invoicing in euros, Shrewsbury could establish the euro invoice amount by use of the forward exchange rate instead of the current spot rate. The invoice amount in that case would be €461,984 = £320,000 x 1.4437. Shrewsbury can now lock-in a receipt of £320,000 if it simultaneously hedges its euro exposure by selling €461,984 at the forward rate of 1.4437. That is, £320,000 = €461,984/1.4437.。

会计学英语试题及答案一、单项选择题（每题2分，共10题）1. Which of the following is not a financial statement?A. Balance SheetB. Income StatementC. Cash Flow StatementD. Tax Return2. The process of recording all financial transactions in a company is known as:A. BudgetingB. ForecastingC. BookkeepingD. Auditing3. What does the term "Depreciation" refer to?A. The increase in value of an asset over timeB. The decrease in value of an asset over timeC. The sale of an assetD. The purchase of an asset4. Which of the following is not a type of receivable?A. Accounts ReceivableB. Notes ReceivableC. InventoryD. Trade Receivables5. What is the purpose of an audit?A. To ensure compliance with tax lawsB. To verify the accuracy of financial recordsC. To prepare financial statementsD. To manage the company's budget6. The term "Equity" in accounting refers to:A. The total assets of a companyB. The total liabilities of a companyC. The owner's investment in the companyD. The company's net income7. Which of the following is not a component of a balance sheet?A. AssetsB. LiabilitiesC. EquityD. Revenue8. The accounting equation is represented as:A. Assets = Liabilities + EquityB. Assets = Liabilities - EquityC. Assets - Liabilities = EquityD. Assets + Equity = Liabilities9. What is the term used to describe the conversion of cash into other assets?A. InvestingB. FinancingC. OperatingD. Spending10. Which of the following is a non-current asset?A. CashB. InventoryC. LandD. Office Supplies二、多项选择题（每题3分，共5题）1. Which of the following are considered as current assets?A. CashB. Accounts ReceivableC. InventoryD. Land2. The following are examples of liabilities except:A. Accounts PayableB. Long-term DebtC. Common StockD. Retained Earnings3. The following are types of expenses in an income statement except:A. Cost of Goods SoldB. Salaries and WagesC. DividendsD. Depreciation4. Which of the following are considered as equity transactions?A. Issuance of SharesB. Declaration of DividendsC. EarningsD. Payment of Dividends5. The following are true statements about accountingprinciples except:A. The going concern assumptionB. The matching principleC. The cash basis of accountingD. The accrual basis of accounting三、判断题（每题1分，共5题）1. True or False: The accounting cycle includes the processof closing the books at the end of an accounting period.2. True or False: All prepaid expenses are considered current assets.3. True or False: Revenue recognition is based on the cash received.4. True or False: The statement of cash flows is preparedusing the cash basis of accounting.5. True or False: The accounting equation must always balance.四、简答题（每题5分，共2题）1. Explain the difference between revenue and profit.2. Describe the role of the statement of cash flows infinancial reporting.五、计算题（每题10分，共1题）A company has the following transactions during the month:- Cash sales: $10,000- Accounts receivable: $5,000- Accounts payable: $3,000- Inventory purchased on credit: $2,000- Cash paid for expenses: $1,500Calculate the company's cash flow from operating activities for the month.答案：一、单项选择题1. D2. C3. B4. C5. B6. C7. D8. A9. A10. C二、多项选择题1. A, B, C2. C, D3. C4. A, D5. C三、判断题1. True2. True3. False4. False5. True四、简答题1. Revenue is the income generated from the normal business activities of a company over a specific period, before any expenses are deducted. Profit, on the other hand, is the amount of money remaining after all expenses have been deducted from the revenue. It represents the net income or net loss of a company.2. The statement of cash flows is a financial statement that provides information about the cash receipts。

CHAPTER 7 FUTURES AND OPTIONS ON FOREIGN EXCHANGESUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTERQUESTIONS AND PROBLEMSQUESTIONS1. Explain the basic differences between the operation of a currency forward market and a futures market.Answer: The forward market is an OTC market where the forward contract for purchase or sale of foreign currency is tailor-made between the client and its international bank. No money changes hands until the maturity date of the contract when delivery and receipt are typically made. A futures contract is an exchange-traded instrument with standardized features specifying contract size and delivery date. Futures contracts are marked-to-market daily to reflect changes in the settlement price. Delivery is seldom made in a futures market. Rather a reversing trade is made to close out a long or short position.2. In order for a derivatives market to function most efficiently, two types of economic agents are needed: hedgers and speculators. Explain.Answer: Two types of market participants are necessary for the efficient operation of a derivatives market: speculators and hedgers. A speculator attempts to profit from a change in the futures price. To do this, the speculator will take a long or short position in a futures contract depending upon his expectations of future price movement. A hedger, on-the-other-hand, desires to avoid price variation by locking in a purchase price of the underlying asset through a long position in a futures contract or a sales price through a short position. In effect, the hedger passes off the risk of price variation to the speculator who is better able, or at least more willing, to bear this risk.3. Why are most futures positions closed out through a reversing trade rather than held to delivery?Answer: In forward markets, approximately 90 percent of all contracts that are initially established result i n the short making delivery to the long of the asset underlying the contract. This is natural because the terms of forward contracts are tailor-made between the long and short. By contrast, only about one percent of currency futures contracts result in delivery. While futures contracts are useful for speculation and hedgi ng, their standardized delivery dates make them unlikely to correspond to the actual future dates when foreignexchange transactions will occur. Thus, they are generally closed out in a reversing trade. In fact, the commission that buyers and sellers pay to transact in the futures market is a single amount that covers the round-trip transactions of initiating and closing out the position.4. How can the FX futures market be used for price discovery?Answer: To the extent that FX forward prices are an unbiased predictor of future spot exchange rates, the market anticipates whether one currency will appreciate or depreciate versus another. Because FX futures contracts trade in an expiration cycle, different contracts expire at different periodic dates into the future. The pattern of the prices of these cont racts provides information as to the market’s current belief about the relative future value of one currency versus another at the scheduled expiration dates of the contracts. One will generally see a steadily appreciating or depreciating pattern; however, it may be mixed at times. Thus, the futures market is useful for price discovery, i.e., obtaining the market’s forecast of the spot exchange rate at different future dates.5. What is the major difference in the obligation of one with a long position in a futures (or forward) contract in comparison to an options contract?Answer: A futures (or forward) contract is a vehicle for buying or selling a stated amount of foreign exchange at a stated price per unit at a specified time in the future. If the long holds the contract to the delivery date, he pays the effective contractual futures (or forward) price, regardless of whether it is an advantageous price in comparison to the spot price at the delivery date. By contrast, an option is a contract giving the long the right to buy or sell a given quantity of an asset at a specified price at some time in the future, but not enforcing any obligation on him if the spot price is more favorable than the exercise price. Because the option owner does not have to exercise the option if it is to his disadvantage, the option has a price, or premium, whereas no price is paid at inception to enter into a futures (or forward) contract.6. What is meant by the terminology that an option is in-, at-, or out-of-the-money?Answer: A call (put) option with S t > E (E > S t) is referred to as trading in-the-money. If S t E the option is trading at-the-money. If S t< E (E < S t) the call (put) option is trading out-of-the-money.7. List the arguments (variables) of which an FX call or put option model price is a function. How does the call and put premium change with respect to a change in the arguments?Answer: Both call and put options are functions of only six variables: S t, E, r i, r$, T andσ.When all else remains the same, the price of a European FX call (put) option will increase:1. the larger (smaller) is S,2. the smaller (larger) is E,3. the smaller (larger) is r i,4. the larger (smaller) is r$,5. the larger (smaller) r$ is relative to r i, and6. the greater is σ.When r$ and r i are not too much different in size, a European FX call and put will increase in price when the option term-to-maturity increases. However, when r$ is very much larger than r i, a European FX call will increase in price, but the put premium will decrease, when the option term-to-maturity increases. The opposite is true when r i is very much greater than r$. For American FX options the analysis is less complicated. Since a longer term American option can be exercised on any date that a shorter term option can be exercised, or a some later date, it follows that the all else remaining the same, the longer term American option will sell at a price at least as large as the shorter term option.PROBLEMS1. Assume today’s settlement price on a CME EUR futures contract is $1.3140/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next three days’ settlement prices are $1.3126, $1.3133, and $1.3049. Calculate the chan ges in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day.Solution: $1,700 + [($1.3140 - $1.3126) + ($1.3126 - $1.3133)+ ($1.3133 - $1.3049)] x EUR125,000 = $2,837.50,where EUR125,000 is the contractual size of one EUR contract.2. Do problem 1 again assuming you have a long position in the futures contract.Solution: $1,700 + [($1.3126 - $1.3140) + ($1.3133 - $1.3126) + ($1.3049 - $1.3133)] x EUR125,000 = $562.50,where EUR125,000 is the contractual size of one EUR contract.With only $562.50 in your performance bond account, you would experience a margin call requesting that additional funds be added to your performance bond account to bring the balance back up to the initial performance bond level.3. Using the quotations in Exhibit 7.3, calculate the face value of the open interest in the June 2005 Swiss franc futures contract.Solution: 2,101 contracts x SF125,000 = SF262,625,000.where SF125,000 is the contractual size of one SF contract.4. Using the quotations in Exhibit 7.3, note that the June 2005 Mexican peso futures contract has a price of $0.08845. You believe the spot price in June will be $0.09500. What speculative position would you enter into to attempt to profit from your beliefs? Calculate your anticipated profits, assuming you take a position in three contracts. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes?Solution: If you expect the Mexican peso to rise from $0.08845 to $0.09500, you would take a long position in futures since the futures price of $0.08845 is less than your expected spot price.Your anticipated profit from a long position in three contracts is: 3 x ($0.09500 - $0.08845) x MP500,000 = $9,825.00, where MP500,000 is the contractual size of one MP contract.If the futures price is an unbiased predictor of the expected spot price, the expected spot price is the futures price of $0.08845/MP. If this spot price materializes, you will not have any profits or losses from your short position in three futures contracts: 3 x ($0.08845 - $0.08845) x MP500,000 = 0.5. Do problem 4 again assuming you believe the June 2005 spot price will be $0.08500.Solution: If you expect the Mexican peso to depreciate from $0.08845 to $0.07500, you would take a short position in futures since the futures price of $0.08845 is greater than your expected spot price.Your anticipated profit from a short position in three contracts is: 3 x ($0.08845 - $0.07500) x MP500,000 = $20,175.00.If the futures price is an unbiased predictor of the future spot price and this price materializes, you will not profit or lose from your long futures position.6. George Johnson is considering a possible six-month $100 million LIBOR-based, floating-rate bank loan to fund a project at terms shown in the table below. Johnson fears a possible rise in the LIBOR rate by December and wants to use the December Eurodollar futures contract to hedge this risk. The contract expires December 20, 1999, has a US$ 1 million contract size, and a discount yield of7.3 percent.Johnson will ignore the cash flow implications of marking to market, initial margin requirements, and any timing mismatch between exchange-traded futures contract cash flows and the interest payments due in March.Loan TermsSeptember 20, 1999 December 20, 1999 March 20, 2000 ∙Borrow $100 million at ∙Pay interest for first three ∙Pay back principal September 20 LIBOR + 200 months plus interestbasis points (bps) ∙Roll loan over at∙September 20 LIBOR = 7% December 20 LIBOR +200 bpsLoan First loan payment (9%) Second paymentinitiated and futures contract expires and principal↓↓↓∙∙9/20/99 12/20/99 3/20/00a. Formulate Johnson’s September 20 floating-to-fixed-rate strategy using the Eurodollar future contracts discussed in the text above. Show that this strategy would result in a fixed-rate loan, assuming an increase in the LIBOR rate to 7.8 percent by December 20, which remains at 7.8 percent through March 20. Show all calculations.Johnson is considering a 12-month loan as an alternative. This approach will result in two additional uncertain cash flows, as follows:Loan First Second Third Fourth payment initiated payment (9%) payment payment and principal↓↓↓↓↓∙∙∙∙9/20/99 12/20/99 3/20/00 6/20/00 9/20/00b. Describe the strip hedge that Johnson could use and explain how it hedges the 12-month loan (specify number of contracts). No calculations are needed.CFA Guideline Answera. The basis point value (BPV) of a Eurodollar futures contract can be found by substituting the contract specifications into the following money market relationship:BPV FUT = Change in Value = (face value) x (days to maturity / 360) x (change in yield)= ($1 million) x (90 / 360) x (.0001)= $25The number of contract, N, can be found by:N = (BPV spot) / (BPV futures)= ($2,500) / ($25)= 100ORN = (value of spot position) / (face value of each futures contract)= ($100 million) / ($1 million)= 100ORN = (value of spot position) / (value of futures position)= ($100,000,000) / ($981,750)where value of futures position = $1,000,000 x [1 – (0.073 / 4)]102 contractsTherefore on September 20, Johnson would sell 100 (or 102) December Eurodollar futures contracts at the 7.3 percent yield. The implied LIBOR rate in December is 7.3 percent as indicated by the December Eurofutures discount yield of 7.3 percent. Thus a borrowing rate of 9.3 percent (7.3 percent + 200 basis points) can be locked in if the hedge is correctly implemented.A rise in the rate to 7.8 percent represents a 50 basis point (bp) increase over the implied LIBOR rate. For a 50 basis point increase in LIBOR, the cash flow on the short futures position is:= ($25 per basis point per contract) x 50 bp x 100 contracts= $125,000.However, the cash flow on the floating rate liability is:= -0.098 x ($100,000,000 / 4)= - $2,450,000.Combining the cash flow from the hedge with the cash flow from the loan results in a net outflow of $2,325,000, which translates into an annual rate of 9.3 percent:= ($2,325,000 x 4) / $100,000,000 = 0.093This is precisely the implied borrowing rate that Johnson locked in on September 20. Regardless of the LIBOR rate on December 20, the net cash outflow will be $2,325,000, which translates into an annualized rate of 9.3 percent. Consequently, the floating rate liability has been converted to a fixed rate liability in the sense that the interest rate uncertainty associated with the March 20 payment (using the December 20 contract) has been removed as of September 20.b. In a strip hedge, Johnson would sell 100 December futures (for the March payment), 100 March futures (for the June payment), and 100 June futures (for the September payment). The objective is to hedge each interest rate payment separately using the appropriate number of contracts. The problem is the same as in Part A except here three cash flows are subject to rising rates and a strip of futures is used tohedge this interest rate risk. This problem is simplified somewhat because the cash flow mismatch between the futures and the loan payment is ignored. Therefore, in order to hedge each cash flow, Johnson simply sells 100 contracts for each payment. The strip hedge transforms the floating rate loan into a strip of fixed rate payments. As was done in Part A, the fixed rates are found by adding 200 basis points to the implied forward LIBOR rate indicated by the discount yield of the three different Eurodollar futures contracts. The fixed payments will be equal when the LIBOR term structure is flat for the first year.7. Jacob Bower has a liability that:∙has a principal balance of $100 million on June 30, 1998,∙accrues interest quarterly starting on June 30, 1998,∙pays interest quarterly,∙has a one-year term to maturity, and∙calculates interest due based on 90-day LIBOR (the London Interbank OfferedRate).Bower wishes to hedge his remaining interest payments against changes in interest rates.Bower has correctly calculated that he needs to sell (short) 300 Eurodollar futures contracts to accomplish the hedge. He is considering the alternative hedging strategies outlined in the following table.Initial Position (6/30/98) in90-Day LIBOR Eurodollar ContractsStrategy A Strategy BContract Month (contracts) (contracts)September 1998 300 100December 1998 0 100March 1999 0 100a. Explain why strategy B is a more effective hedge than strategy A when the yield curveundergoes an instantaneous nonparallel shift.b. Discuss an interest rate scenario in which strategy A would be superior to strategy B.CFA Guideline Answera. Strategy B’s SuperiorityStrategy B is a strip hedge that is constructed by selling (shorting) 100 futures contracts maturing in each of the next three quarters. With the strip hedge in place, each quarter of the coming year is hedged against shifts in interest rates for that quarter. The reason Strategy B will be a more effective hedge than Strategy A for Jacob Bower is that Strategy B is likely to work well whether a parallel shift or a nonparallel shift occurs over the one-year term of Bower’s liability. That is, regardless of what happens to the term structure, Strategy B structures the futures hedge so that the rates reflected by the Eurodollar futures cash price match the applicable rates for the underlying liability-the 90day LIBOR-based rate on Bower’s liability. The same is not true for Strategy A. Because Jacob Bower’s liability carries a floating interest rate that resets quarterly, he needs a strategy that provides a series of three-month hedges. Strategy A will need to be restructured when the three-month September contract expires. In particular, if the yield curve twists upward (futures yields rise more for distant expirations than for near expirations), Strategy A will produce inferior hedge results.b. Scenario in Which Strategy A is SuperiorStrategy A is a stack hedge strategy that initially involves selling (shorting) 300 September contracts. Strategy A is rarely better than Strategy B as a hedging or risk-reduction strategy. Only from the perspective of favorable cash flows is Strategy A better than Strategy B. Such cash flows occur only in certain interest rate scenarios. For example Strategy A will work as well as Strategy B for Bower’s liability if interest rates (instantaneously) change in parallel fashion. Another interest rate scenario where Strategy A outperforms Strategy B is one in which the yield curve rises but with a twist so that futures yields rise more for near expirations than for distant expirations. Upon expiration of the September contract, Bower will have to roll out his hedge by selling 200 December contracts to hedge the remaining interest payments. This action will have the effect that the cash flow from Strategy A will be larger than the cash flow from Strategy B because the appreciation on the 300 short September futures contracts will be larger than the cumulative appreciation in the 300 contracts shorted in Strategy B (i.e., 100 September, 100 December, and 100 March). Consequently, the cash flow from Strategy A will more than offset the increase in the interest payment on the liability, whereas the cash flow from Strategy B will exactly offset the increase in the interest payment on the liability.8. Use the quotations in Exhibit 7.7 to calculate the intrinsic value and the time value of the 97 September Japanese yen American call and put options.Solution: Premium - Intrinsic Value = Time Value97 Sep Call 2.08 - Max[95.80 – 97.00 = - 1.20, 0] = 2.08 cents per 100 yen97 Sep Put 2.47 - Max[97.00 – 95.80 = 1.20, 0] = 1.27 cents per 100 yen9. Assume spot Swiss franc is $0.7000 and the six-month forward rate is $0.6950. What is the minimum price that a six-month American call option with a striking price of $0.6800 should sell for in a rational market? Assume the annualized six-month Eurodollar rate is 3 ½ percent.Solution:Note to Instructor: A complete solution to this problem relies on the boundary expressions presented in footnote 3 of the text of Chapter 7.C a≥Max[(70 - 68), (69.50 - 68)/(1.0175), 0]≥Max[ 2, 1.47, 0] = 2 cents10. Do problem 9 again assuming an American put option instead of a call option.Solution: P a≥Max[(68 - 70), (68 - 69.50)/(1.0175), 0]≥Max[ -2, -1.47, 0] = 0 cents11. Use the European option-pricing models developed in the chapter to value the call of problem 9 and the put of problem 10. Assume the annualized volatility of the Swiss franc is 14.2 percent. This problem can be solved using the FXOPM.xls spreadsheet.Solution:d1 = [ln(69.50/68) + .5(.142)2(.50)]/(.142)√.50 = .2675d2 = d1 - .142√.50 = .2765 - .1004 = .1671N(d1) = .6055N(d2) = .5664N(-d1) = .3945N(-d2) = .4336C e = [69.50(.6055) - 68(.5664)]e-(.035)(.50) = 3.51 centsP e = [68(.4336) - 69.50(.3945)]e-(.035)(.50) = 2.03 cents12. Use the binomial option-pricing model developed in the chapter to value the call of problem 9.The volatility of the Swiss franc is 14.2 percent.Solution: The spot rate at T will be either 77.39¢ = 70.00¢(1.1056) or 63.32¢ = 70.00¢(.9045), where u = e.142 .50= 1.1056 and d = 1/u= .9045. At the exercise price of E= 68, the option will only be exercised at time T if the Swiss franc appreciates; its exercise value would be C uT= 9.39¢ = 77.39¢ - 68. If the Swiss franc depreciates it would not be rational to exercise the option; its value would be C dT = 0.The hedge ratio is h = (9.39 – 0)/(77.39 – 63.32) = .6674.Thus, the call premium is:C0= Max{[69.50(.6674) – 68((70/68)(.6674 – 1) +1)]/(1.0175), 70 – 68}= Max[1.64, 2] = 2 cents per SF.MINI CASE: THE OPTIONS SPECULATORA speculator is considering the purchase of five three-month Japanese yen call options with a striking price of 96 cents per 100 yen. The premium is 1.35 cents per 100 yen. The spot price is 95.28 cents per 100 yen and the 90-day forward rate is 95.71 cents. The speculator believes the yen will appreciate to $1.00 per 100 yen over the next three months. As the speculator’s assistant, you have been asked to prepare the following:1. Graph the call option cash flow schedule.2. Determine the speculator’s profit if the yen appreciates to $1.00/100 yen.3. Determine the speculator’s profit if the yen only appreciates to the forward rate.4. Determine the future spot price at which the speculator will only break even.Suggested Solution to the Options Speculator:1.-2. (5 x ¥6,250,000) x [(100 - 96) - 1.35]/10000 = $8,281.25.3. Since the option expires out-of-the-money, the speculator will let the option expire worthless. He will only lose the option premium.4. S T = E + C = 96 + 1.35 = 97.35 cents per 100 yen.。

会计英语考试题目及答案一、选择题（每题2分，共20分）1. Which of the following is a basic accounting principle?A. The Going Concern PrincipleB. The Historical Cost PrincipleC. Both A and BD. Neither A nor BAnswer: C. Both A and B2. What is the term for the systematic arrangement of accounts in a specific order?A. JournalB. LedgerC. Trial BalanceD. Chart of AccountsAnswer: D. Chart of Accounts3. What does the term "Debit" mean in accounting?A. An increase in assetsB. A decrease in liabilitiesC. An increase in equityD. A decrease in expensesAnswer: A. An increase in assets4. Which of the following is not a type of financialstatement?A. Balance SheetB. Income StatementC. Cash Flow StatementD. Payroll ReportAnswer: D. Payroll Report5. What is the purpose of an adjusting entry?A. To update the financial recordsB. To prepare for the next accounting periodC. To correct errors in the accounting recordsD. All of the aboveAnswer: D. All of the above6. Which of the following is an example of a current asset?A. InventoryB. LandC. EquipmentD. Bonds PayableAnswer: A. Inventory7. What is the formula for calculating the return on investment (ROI)?A. (Net Income / Total Assets) * 100B. (Net Income / Total Equity) * 100C. (Net Income / Investment) * 100D. (Total Assets / Net Income) * 100Answer: C. (Net Income / Investment) * 1008. What is the accounting equation?A. Assets = Liabilities + EquityB. Liabilities - Equity = AssetsC. Assets + Liabilities = EquityD. Equity + Assets = LiabilitiesAnswer: A. Assets = Liabilities + Equity9. What is the purpose of depreciation?A. To reduce the value of an asset over timeB. To increase the value of an asset over timeC. To calculate the cost of an assetD. To determine the net income of a companyAnswer: A. To reduce the value of an asset over time10. Which of the following is not a function of a general ledger?A. To record daily transactionsB. To summarize financial informationC. To provide a detailed account of each transactionD. To prepare financial statementsAnswer: A. To record daily transactions二、简答题（每题5分，共30分）1. Explain the difference between an asset and a liability. Answer: An asset is a resource owned by a business that hasfuture economic benefit, such as cash, inventory, or property.A liability is an obligation or debt that a business owes to others, such as loans, accounts payable, or salaries payable.2. What is the purpose of a balance sheet?Answer: The purpose of a balance sheet is to provide a snapshot of a company's financial position at a specificpoint in time, showing the company's assets, liabilities, and equity.3. Define the term "revenue."Answer: Revenue is the income generated from the normal business operations of a company, such as the sale of goodsor services.4. What is the difference between a journal and a ledger?Answer: A journal is a book that records financialtransactions in chronological order, while a ledger is a book that summarizes and organizes the financial transactions by accounts.5. Explain the concept of accrual accounting.Answer: Accrual accounting is a method of accounting where revenues and expenses are recorded when they are earned or incurred, not when cash is received or paid.6. What is the purpose of a trial balance?Answer: The purpose of a trial balance is to ensure that the total debits equal the total credits in the general ledger, indicating that the accounting records are in balance.三、案例分析题（每题25分，共50分）1. A company purchased equipment for $50,000 on January 1, 2023, with a useful life of 5 years and no residual value. Calculate the annual depreciation expense using the straight-line method.Answer: Using the straight-line method, the annual depreciation expense is calculated as follows:Depreciation Expense = (Cost of Equipment - Residual Value) / Useful LifeDepreciation Expense = ($50,000 - $0) / 5 = $10,000 per year2. A company has the following transactions for the month of March 2023:- Sold goods for $20,000 on credit.- Purchased inventory for $15,000 in cash.- Paid $2,000 in salaries.- Received $18,。

财务管理英文题库及答案1. Question: What is the primary goal of financial management in a business?Answer: The primary goal of financial management in a business is to maximize the value of the firm to its shareholders by making optimal investment and financing decisions.2. Question: What is the difference between a current asset and a non-current asset?Answer: A current asset is an asset that is expected to be converted to cash or used up within one year or one operating cycle of the business. A non-current asset, on the other hand, is an asset that is not expected to be converted to cash or used up within one year or one operating cycle.3. Question: Explain the concept of Time Value of Money (TVM).Answer: The Time Value of Money (TVM) is a financial concept that states that a sum of money received today isworth more than the same sum received in the future due toits potential earning capacity. This principle is fundamental to finance and is used to evaluate the relative worth of money at different points in time.4. Question: What is the formula for calculating the presentvalue of a future sum of money?Answer: The formula for calculating the present value (PV) of a future sum of money (FV) is: PV = FV / (1 + r)^n, where r is the discount rate and n is the number of periods.5. Question: Define the term 'Leverage' in the context of financial management.Answer: Leverage in financial management refers to the use of borrowed funds to increase the potential return of an investment. It is a strategy that can amplify gains but also increases the risk of losses if the investment does not perform as expected.6. Question: What is the DuPont Identity and how is it usedin financial analysis?Answer: The DuPont Identity is a formula used to break down the return on equity (ROE) into three parts: net profit margin, asset turnover, and financial leverage. It is used in financial analysis to understand the drivers of a company's profitability and to compare it with other companies.7. Question: How does inflation affect a company's financial statements?Answer: Inflation affects a company's financial statements by reducing the purchasing power of money. It can lead to higher costs for raw materials and labor, which can decrease profit margins. Additionally, inflation can cause assets andliabilities to be understated, and it may affect the real value of reported earnings.8. Question: Explain the concept of Capital Budgeting and its importance.Answer: Capital Budgeting is the process of evaluating the profitability of long-term investments or projects. It is important because it helps a company decide which projects to undertake based on their potential to generate returns over time, considering the time value of money and the risks involved.9. Question: What is the difference between a fixed cost anda variable cost?Answer: A fixed cost is a cost that does not change with the level of production or sales, such as rent or salaries. A variable cost, however, changes in direct proportion to the level of production or sales, such as raw materials or direct labor costs.10. Question: Define the term 'Liquidity Ratios' and provide examples.Answer: Liquidity Ratios are financial metrics used to measure a company's ability to pay off its short-term debts. Examples include the Current Ratio (current assets divided by current liabilities) and the Quick Ratio (current assets minus inventory divided by current liabilities). These ratios help assess the liquidity position of a business.。

财务管理学基础试题及答案一、选择题（每题2分，共20分）1. 财务管理的核心目标是（）。

A. 利润最大化B. 股东财富最大化C. 企业价值最大化D. 成本最小化2. 以下哪项不是财务杠杆的表现形式？（）A. 债务融资B. 权益融资C. 经营杠杆D. 管理杠杆3. 企业进行长期投资决策时，通常采用哪种方法来评估投资项目的可行性？（）A. 净现值法B. 利润率法C. 投资回报率法D. 现金流量法4. 以下哪项不是流动资产？（）A. 现金B. 应收账款C. 存货D. 长期股权投资5. 资本结构理论中，哪种理论认为企业的价值与其资本结构无关？（）A. 代理理论B. 交易成本理论C. 莫迪利亚尼-米勒理论D. 信号理论...（此处省略其他选择题）二、判断题（每题1分，共10分）1. 企业的财务杠杆越高，其财务风险也越高。

（）2. 企业进行资本预算时，应只考虑直接成本，而忽略间接成本。

（）3. 财务比率分析是评价企业财务状况的重要工具。

（）4. 企业的现金流量表是反映企业现金流动情况的财务报表。

（）5. 企业进行长期投资时，应优先考虑风险较低的投资项目。

（）...（此处省略其他判断题）三、简答题（每题5分，共20分）1. 简述财务杠杆对企业的影响。

2. 什么是资本成本，它对企业投资决策有何影响？3. 请解释什么是流动比率，并说明其在企业财务分析中的作用。

4. 什么是净现值法，它在投资决策中如何应用？四、计算题（每题10分，共30分）1. 某公司计划购买一台设备，购买成本为100万元，预计使用寿命为5年，残值为10万元。

该设备每年能带来20万元的净收入。

假设折现率为10%，请计算该投资的净现值。

2. 某企业有100万元的流动资产和50万元的流动负债。

计算其流动比率，并分析其短期偿债能力。

3. 某公司发行了面值为1000元的债券，票面利率为5%，市场利率为6%。

假设投资者以950元的价格购买了该债券，请计算其到期收益率。

第一章1 CORRECTWhich of the following are microeconomic variables that help define and explain the discipline of finance? DA) risk and returnB) capital structureC) inflationD) all of the aboveFeedback: All of the above are relevant in explaining finance.2 CORRECTOne primary macroeconomic variable that helps define and explain the discipline of finance? CA) capital structureB) inflationC) technologyD) riskFeedback: Technology is very important in explaining the field of finance.3 CORRECTThe money markets deal with _________. BA) securities with a life of more than one yearB) short-term securitiesC) securities such as common stockD) none of the aboveFeedback: The money markets are concerned with short-term securities, those with a life less than one year.4 CORRECTThe ability of a firm to convert an asset to cash is called ___A_________.A) liquidityB) solvencyC) returnD) marketabilityFeedback: Liquidity also means how close an asset is to cash.5 CORRECTEarly in the history of finance, an important issue was: AA) liquidityB) technologyC) capital structureD) financing optionsFeedback: Maintaining liquidity was a major concern historically.6 INCORRECTThe __________C_________ is the most common form of business organization in the U.S.A) corporationB) partnershipC) sole proprietorshipD) none of the aboveFeedback: There are more sole proprietorships than any other form of business organization.7 CORRECTThe _________C___________ has more sales in dollars than any other form of business organization.A) sole proprietorshipB) partnershipC) corporationD) none of the aboveFeedback: The corporation is the most important in terms of dollars.8 CORRECTOne major disadvantage of the sole proprietorship is _____B___________.A) simplicity of decision-makingB) unlimited liabilityC) low operational costsD) none of the aboveFeedback: The owners of a sole proprietorship are personally liable.9 CORRECTThe appropriate firm goal in a capitalist society is ______B__________.A) profit maximizationB) shareholder wealth maximizationC) social responsibilityD) none of the aboveFeedback: The goal is to maximize the wealth of shareholders.10 CORRECTThe agency problem will occur in a business firm if the goals of ______C______ and shareholders do not agree.A) investorsB) the publicC) managementD) none of the above第二章Feedback: The goals of management may be different from those of shareholders.The accounting statements that a firm is required to file include all but one of these. BA) Balance SheetB) Statement of Accounts ReceivableC) Income StatementD) Statement of Cash FlowsFeedback: The required statements include the income statement, balance sheet and statement of changes in cash flows. The statement of changes in owners equity (or retained earnings) is also required by Generally Accepted Accounting Principles but is not covered in this text.2 CORRECTThe _______A________ shows the firm's operating results over a period of time.A) Income StatementB) Statement of Cash FlowsC) Balance SheetD) None of the aboveFeedback: The Income Statement represents a moving picture of a firm's revenues and expenses.3 CORRECTAll of the following except one are tax-deductible expenses. CA) interest expenseB) depreciationC) common stock dividendsD) income taxesFeedback: Common stock dividends are not tax deductible to a firm.4 CORRECTAll of the following are non-operating expenses except ______B_______.A) interest expenseB) cost of goods soldC) preferred stock dividendsD) taxesFeedback: The cost of goods sold is an operating expense.5 CORRECTBondholders receive _____C________ from the business firm.A) preferred dividend paymentsB) common stock paymentsC) interest paymentsD) royaltiesFeedback: Bondholders are typically paid interest semi-annually.6 CORRECTThe ratio of net income to common shares outstanding is called _____B_________.A) price/earnings ratioB) earnings per shareC) dividends per shareD) none of the aboveFeedback: This is called the earnings per share (EPS).7 CORRECTUsually, firms with high price/earnings ratios are _____A_______ firms.A) growthB) decliningC) matureD) none of the aboveFeedback: A high p/e ratio indicates a firm with strong growth prospects8 CORRECTOne of the limitations of the _____C_______ is that it is based on historical costs.A) income statementB) statement of cash flowsC) balance sheetD) none of the aboveFeedback: The balance sheet uses historical costs.9 INCORRECTA source of funds is a: DA) decrease in a current assetB) decrease in a current liabilityC) increase in a current liabilityD) a and c aboveFeedback: A decrease in current assets is equivalent to an increase in current liabilities.10 INCORRECTShort-term financing for a business firm includes: BA) bondsB) accounts payableC) stockholder's equityD) mortgagesFeedback: The other three answers represent long-term financing.第三章Trend analysis allows a firm to compare its performance to: DA) other firms in the industryB) other time periods within the firmC) other industriesD) all of the aboveFeedback: Trend analysis gives an analyst a long-term perspective. As a security analyst and a portfolio manager with Oppenheimer Capital, Dick Glasebrook spoke to a Senior Finance Managers’ Meeting at the Boeing Company on May 4, 1999. He said it is one thing to compare afirm’s performance against competitors within t he same industry. But investors are not limited to specific industries. In fact, investors seek to diversify their investments across many different industries. So management should also compare performance to any well run company--both in and outside of their industry.2Ratio analysis allows a firm to compare its performance to: DA) other firms in the industryB) other time periods within the firmC) other industriesD) all of the aboveFeedback: Trend analysis gives an analyst a long-term perspective. As a security analyst and a portfolio manager with Oppenheimer Capital, Dick Glasebrook spoke to a Senior Finance Managers’ Meeting at the Boeing Company on May 4, 1999. He said it is one thing to compare a firm’s performance against com petitors within the same industry. But investors are not limited to specific industries. In fact, investors seek to diversify their investments across many different industries. So management should also compare performance to any well run company--both in and outside of their industry.3Usually, a firm's suppliers are most interested in its ___D_____ ratios.A) profitabilityB) debtC) asset utilizationD) liquidityFeedback: The suppliers are most interested in getting paid, as shown by the liquidity of the firm.4 CORRECT__________D_____ would be most interested in a firm's debt utilization ratios.A) bondholdersB) stockholdersC) short-term creditorsD) Both A and BFeedback: Debt is indicated by a firm issuing bonds but is also a function of the debt to equity relationship or the degree of financial leverage. Both bond holders and stockholders are interested in this relationship although frof opposing viewpoints.5 CORRECTThe _______C______ ratio indicates the return firm shareholders are earning.A) return on assetsB) return on investmentC) return on equityD) net profit marginFeedback: The shareholders represent equity, or ownership in the firm.6 CORRECTWhich of the following is an example of a profitability ratio? CA) Quick ratioB) Average collection periodC) Return on equityD) Times interest earnedFeedback: This is the only profitability ratio that is listed. All profitability ratios have net income in the denominator.7Total asset turnover will indicate if there is a problem with the ___C______ ratio.A) debt to assetsB) times interest earnedC) fixed asset turnoverD) currentFeedback: Fixed asset turnover is part of total asset turnover.8 CORRECTAll of the following are asset utilization ratios except: DA) average collection periodB) inventory turnoverC) receivables turnoverD) return on assetsFeedback: Return on assets is a profitability ratio. Any ratio with net income in the denominator is a profitability ratio.9 CORRECTIf a firm's debt ratio is 55%, this means ____C__ of the firm's assets are financed by equity financing.A) 55%B) 50%C) 45%D) not enough information to answer questionFeedback: The equity portion plus the debt portion must add up to 100%.10 CORRECTAll of the following can present problems for ratio analysis except: DA) inflationB) inventory accounting methodsC) disinflationD) all of the aboveFeedback: These all may cause problems.第四章Planning for future growth is called: CA) capital budgetingB) working capital managementC) financial forecastingD) none of the aboveFeedback: This involves looking ahead to the future.2 INCORRECTWhich one of the following is NOT a tool of financial forecasting? BA) cash budgetB) capital budgetC) pro forma balance sheetD) pro forma income statementFeedback: The other three are all tools used by an analyst.3 CORRECTThe first step in developing a pro forma income statement is to: AA) build a sales forecastB) determine the production scheduleC) determine cost of goods soldD) none of the aboveFeedback: A sales forecast begins the process.4 INCORRECTPro forma statements are _B______ statements.A) actualB) projectedC) a previous year'sD) none of the aboveFeedback: Pro forma statements are based on estimates or projections.5 INCORRECTAll of the following compose cost of goods sold except ______D__________.A) raw materialB) laborC) overheadD) all of the above are part of cost of goods soldFeedback: The cost of good sold involves all three of these items.6 INCORRECTFinancial managers use the ______B_______ to plan for monthly financing needs.A) capital budgetB) cash budgetC) pro forma income statementD) none of the aboveFeedback: The cash budget allows for planning cash needs.7 INCORRECTThe payments that a firm collects from its customers are called _______C________.A) cash disbursementsB) cash outflowsC) cash receiptsD) none of the aboveFeedback: Cash receipts represent cash coming into the firm.8 INCORRECTExamples of cash disbursements are all but _________B________.A) payment for materials purchasedB) collection of accounts receivableC) payment of dividendsD) payment of taxesFeedback: The collection of accounts receivable is an example of a cash receipt, not a cash disbursement.9 CORRECTIn developing the pro forma balance sheet, we get common stock from __________A_______.A) the firm's previous balance sheetB) the firm's cash budgetC) the firm's income statementD) none of the aboveFeedback: Common stock appears on the balance sheet.10 INCORRECTThe percent of sales method of financial forecasting shows us the relationship between________D___ and financing needs.A) changes in the level of liabilitiesB) changes in the level of assetsC) changes in debtD) changes in the level of salesFeedback: It compares the relationship between balance sheet items and sales.第五章An example of a semi-variable cost is: DA) rentB) raw materialC) depreciationD) utilitiesFeedback: The other three represent fixed or variable costs.2 CORRECT_________A____ is the point at which firm profit is equal to zero.A) breakevenB) operating breakevenC) financial leverageD) combined breakevenFeedback: This is the point where the firm's revenues equal its expenses.3 INCORRECTIn breakeven analysis, if fixed costs rise, then the breakeven point will _____B_____.A) fallB) riseC) stay the sameD) none of the aboveFeedback: This implies that a larger quantity will have to be sold in order to break even.4 INCORRECTIn the breakeven formula, Price - Variable Cost is called the___C__________.A) breakeven pointB) leverageC) contribution marginD) none of the aboveFeedback: This implies that a larger quantity will have to be sold in order to cover the additional fixed costs and still break even.5 INCORRECTWhich of the following types of firms may operate with high operating leverage? BA) a doctor's officeB) an auto manufacturing facilityC) a mental health clinicD) none of the above would have high operating leverageFeedback: This implies a high break-even point and high operating expenses.6 INCORRECTThe __________C__________ is the percentage change in operating income that results from a percentage change in sales.A) degree of financial leverageB) breakeven pointC) degree of operating leverageD) degree of combined leverageFeedback: This is called the degree of operating leverage (DOL).7 CORRECTIf interest expenses for a firm rise, we know that firm has taken on more ______A________.A) financial leverageB) operating leverageC) fixed assetsD) none of the aboveFeedback: Financial leverage refers to interest expense on debt.8 INCORRECTThe ________B________ is the percentage change in earnings per share that results from a percentage change in operating income.A) degree of combined leverageB) degree of financial leverageC) breakeven pointD) degree of operating leverageFeedback: This is known as the degree of financial leverage (DFL).9 INCORRECTCombined leverage is the percentage change in relationship between sales and ______C______.A) operating incomeB) operating leverageC) earnings per shareD) breakeven pointFeedback: This combines operating leverage and financial leverage.10 INCORRECTA highly leveraged firm is ____B______ risky than its peers.A) lessB) moreC) the sameD) none of the aboveFeedback: Leverage is equivalent to risk, because it implies a higher level of fixed costs.第六章Working capital management involves the financing and management of the __C_____ assets of the firm.A) fixedB) totalC) currentD) none of the aboveFeedback: Working capital management deals with the financing and management of currentassets.2 INCORRECTAn asset sold at the end of a specified time period is called a ______B_______ asset.A) temporary currentB) self-liquidatingC) currentD) permanent currentFeedback: A self-liquidating asset is one that will be sold after a certain amount of time.3 CORRECTFixed assets are usually financed with _______A______ funds.A) long-termB) short-termC) permanentD) none of the aboveFeedback: Fixed assets are by definition long-term assets.4 INCORRECT_________B_____ is usually used to finance self-liquidating assets.A) Long-term financingB) Short-term financingC) Permanent financingD) none of the aboveFeedback: These are short-term or temporary assets.5 INCORRECTShort-term interest rates, in a normal economy, are generally ____C____ than long-term rates.A) higherB) the sameC) lowerD) none of the aboveFeedback: Long-term interest rates are normally higher than short-term interest rates to compensate for uncertainty or risk.6 INCORRECTThe expectations hypothesis says that _____B____ interest rates are a function of _______ interest rates.A) short-term; long-termB) long-term; short-termC) short-term; short-termD) none of the aboveFeedback: This theory says that long-term interest rates reflect the average of short-term expected rates.7 INCORRECTInsurance companies would tend to invest in ______C____ securities.A) short-termB) intermediate termC) long-termD) not enough information to answerFeedback: An insurance company would prefer long-term securities because they are more conservative or safer.8 INCORRECTThe _________D_____ theory says that investors must be paid a premium to hold long-term securities.A) expectations hypothesisB) time value theoryC) segmentationD) liquidity premiumFeedback: This is the liquidity premium.9 INCORRECTShort-term financing plans with high liquidity have: BA) high return and high riskB) moderate return and moderate riskC) low profit and low riskD) none of the aboveFeedback: This is known as a "middle-of-the-road" approach.10 INCORRECTLong-term financing plans with low liquidity have: BA) high return and high riskB) moderate return and moderate riskC) low return and low riskD) none of the aboveFeedback: This is also known as a "middle-of-the-road" approach.第七章The transaction motive for holding cash is for BA) a safety cushionB) daily operating requirementsC) compensating balance requirementsD) none of the aboveFeedback: This is money for everyday transactions.2 CORRECTWhich of the following motives for holding cash is required by the bank before loaning money? AA) compensating balance motiveB) transactions motiveC) precautionary motiveD) none of the aboveFeedback: This can be considered a form of collateral.3 INCORRECTThe difference between the cash balance on the firm's books and the balance shown on the bank's books is called: BA) the compensating balanceB) floatC) a safety cushionD) none of the aboveFeedback: Float implies that it takes time for checks to clear.4 CORRECTElectronic funds transfer has _____A_____ the use of float.A) reducedB) increasedC) had no effect onD) none of the aboveFeedback: Electronic funds transfer (EFT) has moved cash more quickly and reduced float.5 INCORRECTThe most utilized marketable security by most firms is the: DA) Treasury bondB) Agency securityC) Certificate of DepositD) Treasury billFeedback: Treasury bills (T-Bills) are very safe, popular investments.6 INCORRECTOf the following marketable securities, which are guaranteed by the Federal government? DA) agency securitiesB) negotiable certificates of depositC) banker's acceptancesD) none of the aboveFeedback: None of these are backed by the government.7 INCORRECTThe 5 C's of credit include: DA) conditionsB) collateralC) characterD) all of the aboveFeedback: The other two C's of credit are capacity and capital.8 INCORRECT BThe use of safety stock by a firm will:A) reduce inventory costsB) increase inventory costsC) have no effect on inventory costsD) none of the aboveFeedback: Safety stock is extra inventory a firm keeps in case of unforseen circumstances.9 INCORRECTAll of these factors are used in credit policy administration except: CA) credit standardsB) terms of tradeC) dollar amount of receivablesD) collection policyFeedback: The other three choices are the primary policy variables to consider.10 CORRECTFirms aim to hold ___A___ cash balances since cash is a non-interest earning asset.A) lowB) averageC) highD) none of the aboveFeedback: A firm does not want to keep too much cash on hand because it will lose interest (by not keeping the money in a bank).第八章The largest provider of short-term credit for a business is: BA) banking organizationsB) suppliers to the firmC) commercial paperD) EurodollarsFeedback: This is also known as trade credit.2 INCORRECTThe number of days until the firm is past due to a supplier is called the: CA) discount periodB) term to creditC) payment periodD) none of the aboveFeedback: The payment period is the number of days a firm has to pay its bill.3 INCORRECTIf a firm is given trade credit terms of 2/10, net 30, then the cost of the firm failing to take the discount is: CA) 2%B) 30%C) 36.72%D) 10%Feedback: This is calculated using formula 8-1 in this chapter.4 CORRECTThe interest rate given by a bank to its most creditworthy customers is the: AA) prime rateB) LIBOR rateC) federal funds rateD) discount rateFeedback: This is the "best" interest rate charged to people with excellent credit.5 INCORRECTWhich of the following types of bank loans generally have the highest effective rate of interest? DA) simple interest loanB) discount interest loanC) loan with a compensating balanceD) installment loanFeedback: Installment loans tend to be the most expensive.6 INCORRECTIf a firm needs to borrow $100,000, at 8% interest, to finance working capital needs and a 20% compensating is required, then the firm should borrow ____C______.A) $100,000B) $80,000C) $125,000D) $108,000Feedback: The formula to calculate this is: amount needed/(1-c), where c = the compensating balance percentage.7 CORRECTIf a bank offers a firm a simple interest loan of $1000 for 120 days at a cost of $60 interest, what is the effective rate of interest on the loan? AA) 18.00%B) 6.00%C) 20.00%D) none of the aboveFeedback: This is calculated by using formula 8-2 in this chapter.8 INCORRECTIf a company raises money to finance short-term needs by selling its accounts receivable to another party, this is called ___________. CA) pledgingB) warehousingC) factoringD) none of the aboveFeedback: Factoring means selling the accounts receivable outright.9 INCORRECTThe most restrictive policy for using inventory as collateral for short-term borrowing is called: BA) blanket inventory lienB) warehousing inventoryC) trust receiptD) factoringFeedback: This is a complex method of inventory financing wherein the lender takes control of the inventory.10 CORRECTA type of accounts receivable financing where a firm uses its receivables as collateral is called: AA) pledgingB) securitizationC) factoringD) warehousingFeedback: Pledging means using accounts receivable as collateral.第九章Both the future and present value of a sum of money are based on: CA) interest rateB) number of time periodsC) both a and bD) none of the aboveFeedback: These two factors are used in time value of money calculations.2 INCORRECTAn annuity is ___________________. CA) more than one paymentB) a series of unequal but consecutive paymentsC) a series of equal and consecutive paymentsD) a series of equal and non-consecutive paymentsFeedback: An annuity is a stream of equal payments to be received in the future.3 CORRECTIf you have $1000 and you plan to save it for 4 years with an interest rate of 10%, what is the future value of your savings? AA) $1464.00B) $1000.00C) $1331.00D) cannot be determinedFeedback: This is calculated by using formua 9-1 in this chapter.4 INCORRECTTime value of money is an important finance concept because: DA) it takes risk into accountB) it takes time into accountC) it takes compound interest into accountD) all of the aboveFeedback: Time value of money incorporates all of these concepts.5 INCORRECTThe present value of a dollar to be received in the future is: CA) more than a dollarB) equal to a dollarC) less than a dollarD) none of the aboveFeedback: The reason is because you can earn interest on the money.6 CORRECTThe future value of a dollar that you invest today is: AA) more than a dollarB) equal to a dollarC) less than a dollarD) none of the aboveFeedback: Again, the reason is because the money can earn interest.7 INCORRECTThe future value of an annuity is: CA) less than each annuity paymentB) equal to each annuity paymentC) more than each annuity paymentD) none of the aboveFeedback: The reason has to do with compound interest (or interest earning more interest).8 INCORRECTThe concepts of present value and future value are:DA) directly related to each otherB) not related to each otherC) proportionately related to each otherD) inversely related to each otherFeedback: They are essentially opposite sides of a coin.9 INCORRECTIf you win the lottery and you choose to have your proceeds distributed to you over atwenty-year time period, with the first payment coming to you one year from today, which calculation would you use to calculate the worth of those proceeds to you today? DA) future value of a lump sumB) future value of an annuityC) present value of a lump sumD) present value of an annuityFeedback: This is shown by formula 9-4 in this chapter. But this is not a typical situation. Most lotteries (let’s say $1 Million over 20 years), will pay you the first payment today and $50,000 each year for the next 19 years. This is actually an “annuity due” which is not covered in this text. You’d have to calculate the present value of the annuity for 19 years and add the initial $50,000 you received today.10 CORRECTYou have $1000 you want to save. If four different banks offer four different compounding methods for interest, which method should you choose to maximize your $1000? AA) compounded dailyB) compounded quarterlyC) compounded semi-annuallyD) compounded annuallyFeedback: The more often interest is compounded the faster it will grow because you will begin to earn interest on the interest sooner.第十章In valuing a financial asset, you use these variables: DA) present value of future cash flowsB) discount rateC) required rate of returnD) all of the aboveFeedback: All of these are needed in order to value an asset.2 CORRECTThe principal amount of a bond at issue is called: AA) par valueB) coupon valueC) present value of an annuityD) present value of a lump sumFeedback: This is also known as the face value or stated value.3 INCORRECT BIf a bond's value rises above its par value during its life, interest rates have:A) gone upB) gone downC) stayed the sameD) there is no correlation with interest ratesFeedback: There is an inverse relationship between bond prices and interest rates (or yields).4 INCORRECTThe basic "rent" that you are charged when you borrow money is called: CA) inflation premiumB) risk premiumC) real rate of returnD) none of the aboveFeedback: This is known as the opportunity cost in economics.5 INCORRECTAs time to maturity draws near, a bond's value approaches: BA) zeroB) parC) the coupon paymentD) none of the aboveFeedback: The bond price gets closer to its face value the closer it is to maturity (see figure 10-2 in this chapter).6 INCORRECTOne characteristic of preferred stock is that:DA) it has no maturity dateB) it is a hybrid security with characteristics of both common stock and debtC) it pays a fixed dividend paymentD) all of the aboveFeedback: Preferred stock is described by all of the above characteristics.7 CORRECTCommon stock that has no growth in dividends is valued as if it were: AA) preferred stockB) a bondC) an optionD) none of the aboveFeedback: It is treated the same as preferred stock.8 INCORRECT。

CHAPTER 1 GLOBALIZATION AND THE MULTINATIONAL FIRM SUGGESTED ANSWERS TO END-OF-CHAPTER QUESTIONSQUESTIONS1. Why is it important to study international financial managementAnswer: We are now living in a world where all the major economic functions i.e. consumptionproduction and investment are highly globalized. It is thus essential for financial managers to fullyunderstand vital international dimensions of financial management. This global shift is in markedcontrast to a situation that existed when the authors of this book were learning finance some twenty yearsago.At that time most professors customarily and safely to some extent ignored international aspectsof finance. This mode of operation has become untenable since then.2. How is international financial management different from domestic financial managementAnswer: There are three major dimensions that set apart international finance from domestic finance.They are: 1. foreign exchange and political risks 2. market imperfections and 3. expanded opportunity set.3. Discuss the three major trends that have prevailed in international business during the last two decades.Answer: The 1980s brought a rapid integration of international capital and financial markets. Impetus forglobalized financial markets initially came from the governments of major countries that had begun toderegulate their foreign exchange and capital markets. The economic integration and globalization thatbegan in the eighties is picking up speed in the 1990s via privatization. Privatization is the process bywhich a country divests itself of the ownership and operation of a business venture by turning it over tothe free market system. Lastly trade liberalization and economic integration continued to proceed at boththe regional and global levels.4. How is a country‟s economic well-being enhanced through free international trade in goods andservicesAnswer: According to David Ricardo with free international trade it is mutually beneficial for twocountries to each specialize in the production of the goods that it can produce relatively most efficientlyand then trade those goods. By doing so the two countries can increase their combined productionwhich allows both countries to consume more of both goods. This argument remains valid even if acountry can produce both goods more efficiently than the other country. International trade is not a …zero-sum‟ game in which one country benefits at the expense of another country. Rather international tradecould be an …increasing-sum‟ game at which all players become winners.5. What considerations might limit the extent to which the theory of comparative advantage is realisticAnswer: The theory of comparative advantage was originally advanced by the nineteenth centuryeconomist David Ricardo as an explanation for why nations trade with one another. The theory claimsthat economic well-being is enhanced if each country‟s citizens produce what they have a comparativeadvantage in producing relative to the citizens of other countries and then trade products. Underlying thetheory are the assumptions of free trade between nations and that the factors of production landbuildings labor technology and capital are relatively immobile. To the extent that these assumptions donot hold the theory of comparative advantage will not realistically describe international trade.6. What are multinational corporations MNCs and what economic roles do they playAnswer: A multinational corporation MNC can be defined as a business firm incorporated in onecountry that has production and sales operations in several other countries. Indeed some MNCs haveoperations in dozens of different countries. MNCs obtain financing from major money centers around theworld in many different currencies to finance their operations. Global operations force the treasurer‟soffice to establish international banking relationships to place short-term fundsin several currencydenominations and to effectively manage foreign exchange risk.7. Mr. Ross Perot a former Presidential candidate of the Reform Party which is a third political party inthe United States had strongly objected to the creation of the North American Trade AgreementNAFTA which nonetheless was inaugurated in 1994 for the fear of losing American jobs to Mexicowhere it is much cheaper to hire workers. What are the merits and demerits of Mr. Perot‟s position onNAFTA Considering the recent economic developments in North America how would you assess Mr.Perot‟s position on NAFTAAnswer: Since the inception of NAFTA many American companies indeed have invested heavily inMexico sometimes relocating production from the United States to Mexico. Although this might havetemporarily caused unemployment of some American workers they were eventually rehired by otherindustries often for higher wages. Currently the unemployment rate in the U.S. is quite low by historicalstandard. At the same time Mexico has been experiencing a major economic boom. It seems clear thatboth Mexico and the U.S. have benefited from NAFTA. Mr. Perot‟s concern appears to hav e been illfounded.8. In 1995 a working group of French chief executive officers was set up by the Confederation of FrenchIndustry CNPF and the French Association of Private Companies AFEP to study the French corporategovernance structure. The group reported the following among other things “The board of directorsshould not simply aim at maximizing share values as in the U.K. and the U.S. Rather its goal should be toserve the company whose interests should be clearly distinguished from those of its shareholdersemployees creditors suppliers and clients but still equated with their general common interest which isto safeguard the prosperity and continuity of the company”. Evaluate the above recommendation of theworking group.Answer: The recommendations of the French working group clearly show that shareholder wealthmaximization is not a universally accepted goal of corporate management especially outside the UnitedStates and possibly a few other Anglo-Saxon countries including the United Kingdom and Canada. Tosome extent this may reflect the fact that share ownership is not wide spread in most other countries. InFrance about 15 of households own shares.9. Emphasizing the importance of voluntary compliance as opposed to enforcement in the aftermath ofcorporate scandals e.g. Enron and WorldCom U.S. President George W. Bush stated that while tougherlaws might help “ultimately the ethics of American business depends on the conscience of America‟sbusiness leaders.” Describe your view on this statement.Answer: There can be different answers to this question. If business leaders always behave with a highethical standard many of the corporate scandals we have seen lately might not have happened. Since wecannot fully depend on the ethical behavior on the part of business leaders the society should protectitself by adopting therules/regulations and governance structure that would induce business leaders tobehave in the interest of the society at large.10. Suppose you are interested in investing in shares of Nokia Corporation of Finland which is a worldleader in wireless communication. But before you make investment decision you would like to learnabout the company. Visit the website of CNN Financial network and collectinformation about Nokia including the recent stock price history and analysts‟ views of the company.Discuss what you learn about the company. Also discuss how the instantaneous access to information viainternet would affect the nature and workings of financial markets.Answer: As students might have learned from visiting the website information is readily available evenfor foreign companies like Nokia. Ready access to international information helpsintegrate financialmarkets dismantling barriers to international investment and financing. Integration however may help afinancial shock in one market to be transmitted to other markets.MINI CASE: NIKE‟S DECISION Nike a U.S.-based company with a globally recognized brand name manufactures athletic shoes insuch Asian developing countries as China Indonesia and Vietnam using subcontractors and sells theproducts in the U.S. and foreign markets. The company has no production facilities in the United States.In each of those Asian countries where Nike has production facilities the rates of unemployment andunderemployment are quite high. The wage rate is very low in those countries by the U.S. standardhourly wage rate in the manufacturing sector is less than one dollar in each of those countries which iscompared with about 18 in the U.S. In addition workers in those countries often are operating in poorand unhealthy environments and their rights are not well protected. Understandably Asian host countriesare eager to attract foreign investments like Nike‟s to develop their economies and raise the livingstandards of th eir citizens. Recently however Nike came under a world-wide criticism for its practice ofhiring workers for such a low pay “next to nothing” in the words of critics and condoning poor workingconditions in host countries. Evaluate and discuss various …ethical‟ as well as economic ramifications of Nike‟s decision toinvest in those Asian countries.Suggested Solution to Nike‟s Decision Obviously Nike‟s investments in such Asian countries as China Indonesia and Vietnam weremotivated to take advantage of low labor costs in those countries. While Nike was criticized for the poorworking conditions for its workers the company has recognized the problem and has substantiallyimproved the working environments recently. Although Nike‟s workers get paid very low wages by theWestern standard they probably are making substantially more than their local compatriots who are eitherunder- or unemployed. While Nike‟s detractors may have valid points one should not ignore the fact thatthe company is making contributions to the economic welfare of those Asian countries by creating jobopportunities. CHAPTER 1A THEORY OF COMPARATIVE ADVANTAGE SUGGESTED SOLUTIONS TO APPENDIX PROBLEMSPROBLEMS1. Country C can produce seven pounds of food or four yards of textiles per unit of input. Compute theopportunity cost of producing food instead of textiles. Similarly compute the opportunity cost ofproducing textiles instead of food.Solution: The opportunity cost of producing food instead of textiles is one yard of textiles per 7/4 1.75pounds of food. A pound of food has an opportunity cost of4/7 .57 yards of textiles.2. Consider the no-trade input/output situation presented in the following table for Countries X and Y.Assuming that free trade is allowed develop a scenario that will benefit the citizens of both countries.INPUT/OUTPUT WITHOUT TRADE_________________________________________________________________ ______ Country X YTotal___________________________________________________________________ _____I. Units of Input000000_____________________________________________________Food 70 60Textiles 4030______________________________________________________________________ __II. Output per Unit of Inputlbs or yards____________________________________________________Food 17 5Textiles 52_______________________________________________________________________ _III. Total Outputlbs or yards000000____________________________________________________Food 1190 300 1490Textiles 200 60260_____________________________________________________________________ ___IV. Consumptionlbs or yards000000___________________________________________________Food 1190 300 1490Textiles 200 60260_____________________________________________________________________ ___Solution: Examination of the no-trade input/output table indicates that Country X has an absoluteadvantage in the production of food and textiles. Country X can “trade off” one unit of productionneeded to produce 17 pounds of food for five yards of textiles. Thus a yard of textiles has an opportunitycost of 17/5 3.40 pounds of food or a pound of food has an opportunity cost of 5/17 .29 yards oftextiles. Analogously Country Y has an opportunity cost of 5/2 2.50 pounds of food per yard oftextiles or 2/5 .40 yards of textiles per pound of food. In terms of opportunity cost it is clear thatCountry X is relatively more efficient in producing food and Country Y is relatively more efficient inproducing textiles. Thus Country X Y has a comparative advantage in producing food textile iscomparison to Country Y X. When there are no restrictions or impediments to free trade the economic-well being of thecitizens of both countries is enhanced through trade. Suppose that Country X shifts 20000000 unitsfrom the production of textiles to the production of food where it has a comparative advantage and thatCountry Y shifts 60000000 units from the production of food to the production of textiles where it has acomparative advantage. Total output will now be 90000000 x 17 1530000000 pounds of food and20000000 x 5 100000000 90000000 x 2 180000000 280000000 yards of textiles.Further suppose that Country X and Country Y agree on a price of 3.00 pounds of food for one yard oftextiles and that Country X sells Country Y 330000000 pounds of food for 110000000 yards of textiles.Under free trade the following table shows that the citizens of Country X Y have increased theirconsumption of food by 10000000 30000000 pounds and textiles by 10000000 10000000 yards.INPUT/OUTPUT WITH FREE TRADE_________________________________________________________________ _________ Country X YTotal___________________________________________________________________ _______I. Units of Input 000000_______________________________________________________Food 90 0Textiles 2090______________________________________________________________________ ____II. Output per Unit of Input lbs or yards______________________________________________________Food 17 5Textiles 52_______________________________________________________________________ ___III. Total Output lbs or yards 000000_____________________________________________________Food 1530 0 1530Textiles 100 180280_____________________________________________________________________ _____IV. Consumption lbs or yards 000000_____________________________________________________Food 1200 330 1530Textiles 210 70280_____________________________________________________________________ _____ CHAPTER 3 BALANCE OF PAYMENTS SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMSQUESTIONS1. Define the balance of payments.Answer: The balance of payments BOP can be defined as the statistical record of a country‟sinternational transactions over a certain period of time presented in the form of double-entry bookkeeping.2. Why would it be useful.。

英语会计考试题目及答案一、选择题（每题2分，共20分）1. What is the basic accounting equation?A. Assets = Liabilities + EquityB. Assets = Liabilities - EquityC. Assets - Liabilities = EquityD. Liabilities = Assets - EquityAnswer: A2. Which of the following is not a type of intangible asset?A. PatentB. TrademarkC. CopyrightD. InventoryAnswer: D3. What is the purpose of adjusting entries?A. To correct errorsB. To update the financial statementsC. To prepare for closing the booksD. All of the aboveAnswer: D4. What is the term for the process of allocating costs to specific cost objects?A. Cost allocationB. Cost centeringC. Cost accountingD. Cost trackingAnswer: A5. Which of the following is an example of a non-current liability?A. Accounts payableB. Long-term debtC. Wages payableD. Sales tax payableAnswer: B二、简答题（每题10分，共20分）6. Explain the concept of depreciation and its impact on financial statements.Answer: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It reflects the consumption of the asset's economic benefits and is used to match the expense with the revenue generated by the asset. The impact on financial statements includes a reduction in the asset's book value on the balance sheet and an increase in the accumulated depreciation account, as well as a decrease in net income on the income statement due to the depreciation expense.7. What are the main differences between cash and accrualaccounting?Answer: Cash accounting records transactions when cash is received or paid, focusing on the actual movement of cash. Accrual accounting, on the other hand, records transactions when they occur, regardless of when cash is received or paid. Accrual accounting provides a more comprehensive picture of a company's financial performance by matching revenues with the expenses incurred to generate those revenues.三、计算题（每题15分，共30分）8. If a company purchased a machine for $120,000 with an estimated useful life of 10 years and no residual value, calculate the annual depreciation expense using the straight-line method.Answer: Annual depreciation expense = (Cost of the machine - Residual value) / Useful life = ($120,000 - $0) / 10 years = $12,000 per year.9. A company has the following accounts at the end of the year: Accounts Receivable $50,000, Inventory $30,000, and Prepaid Expenses $10,000. Calculate the current assets.Answer: Current assets = Accounts Receivable + Inventory + Prepaid Expenses = $50,000 + $30,000 + $10,000 = $90,000.四、案例分析题（每题15分，共15分）10. A company reported net income of $200,000 for the year. However, they made an error in recording a $10,000 expense that was not included in the income statement. What is thecorrected net income?Answer: The corrected net income should be reduced by the omitted expense. Therefore, the corrected net income = Original net income - Omitted expense = $200,000 - $10,000 = $190,000.五、论述题（每题15分，共15分）11. Discuss the importance of internal controls in preventing fraud and ensuring accurate financial reporting.Answer: Internal controls are critical in preventing fraud and ensuring accurate financial reporting as they provide a system of checks and balances within an organization. They help to safeguard assets, promote operational efficiency, and ensure compliance with laws and regulations. Effective internal controls can deter and detect errors or fraud, thereby enhancing the reliability and integrity of financial statements.考试结束，请考生停止作答。

1. In which of the following depreciation methods are the depreciation costs the highest in the first year of the asset's life?Choose onea. decreasing residue methodb. production method of depreciationc. under none of the above depreciation methodsd. linear depreciation methodA2. Are not external users of accounting information:Choose onea. tax authoritiesb. suppliersc. trade unionsd. potential investorse. managersf. current creditorsE3.Which of the following does NOT belong to the minimum required information to be presented on the face of the statement of comprehensive income in accordance with International Financial Reporting Standards?Choose onea. the dividends distributed during the yearb. tax costsc. components of other comprehensive incomed. incomee. total comprehensive income for the periodf. profit or loss from discontinued operationsg. financial costsF4. The variable overhead costs are:Choose onea. those direct and indirect (indirect) costs that directly depend on changes in production volume, such as direct and indirect laborb. all major technological costs of productionc. any additional production costsd. those indirect costs that change directly or almost directly depending on changes in production volume, such as indirect labor and indirect materialse. those direct costs that change directly or almost directly depending on changes in production volume, such as direct labor and direct materialsD5.Which of the following is NOT a criterion for classifying a liability as current?Choose onea. the liability is held primarily for commercial purposesb. the liability is expected to be settled within 12 m after the end of the reporting periodc. the enterprise has no unconditional right to postpone the settlement of the obligation by at least 12 months after the end of the reporting periodd. the liability is expected to be settled within the normal operating cycle of the entitye. there is no correct answerE6. At the end of the reporting period it is established that the provision accrued during the previous reporting period was overestimated by BGN 20,000. What accounting item should be drawn up in this case?Choose onea. Debit account "Provisions for warranty service" 20 000, Credit account "Other income" 20 000b. Debit account "Provisions for warranty service" 20 000, Credit account "Sales revenues" 20 000c. Debit account "Provisions for warranty service" 20 000, Credit account "Other expenses" 20 000d. Debit account "Expenses for provisions" (20 000), Credit account "Provisions for warranty service" (20 000) - by the red reversal methodD7.Which of the following is NOT an outgoing cash flow from investing activities for a manufacturing enterprise?Choose onea. Repurchase of own sharesb. Cash payments for the purchase of a software productc. Loan granted to a subsidiaryd. Cash payments for the purchase of investments in associatese. All of the above are cash outflows from investing activitiesf. Advance paid for the purchase of a machineE8. The accounting of the impairment of materials is as follows:Choose onea. We debit the account "Expenses for impairment of inventories" and credit the account "Impairment of materials", but with negative amountsb. We debit the account "Impairment of materials" and credit the account "Expenses for impairment of inventories"c. We debit the "Materials" account and credit the "Materials Impairment" accountd. We debit the account "Impairment of materials" and credit the account "Expenses for impairment of inventories", but with negative amountse. We debit the account "Expenses for impairment of inventories" and credit the account "Impairment of materials"f. We debit the account "Impairment of materials" and credit the account "Other expenses"B9. The initial malt on the account "Provisions for warranty service" is BGN 12,000. The accrued expenses for provisions during the reporting period are BGN 45,000. the following accounting item is drawn up:Choose onea. Debit account "Costs for provisions" 60 000, Credit account "Provisions for warranty service"60 000b. Debit account "Provisions for warranty service" 45 000, Debit account "Other expenses" 15 000, Credit account "Cash" 60 000c. Debit account "Provisions for warranty service" 57 000, Debit account "Expenses for provisions" 3 000, Credit account "Cash" 60 000d. Debit account "Expenses for provisions" 60 000, Credit account "Cash" 60 000e. Debit account "Provisions for warranty service" 60 000, Credit account "Cash" 60 000f. Debit account "Provisions for warranty service" 45 000, Debit account "Expenses for provisions"15 000, Credit account "Cash" 60 000F10.Which of the following is NOT a component of equity?Choose onea. fixed capitalb. legal reservesc. revaluation reserved. uncovered loss from previous yearse. financing for the acquisition of a tangible fixed assetf. premium reserveE11. What accounting item is compiled for reporting a received bank loan in the amount of BGN 120,000. Upon concluding the loan agreement, the enterprise has paid a management fee for the bank's tariff in the amount of BGN 6,300?Choose onea. Dt s / ka Skonto by financial instruments 6 300 and Dt s / ka Current account in BGN 113 700; Long-term bank loans received 120,000b. Dt s / ka Current account in BGN 120,000; Kt s / ka Long-term bank loans received 120 100c. Dt s / ka Received long-term bank loans 120,000; Kt s / ka Skonto by financial instruments 6 300 and Kt s / ka Current account in BGN 113 700d. Dt s / ka Current account in BGN 113,700; Long-term bank loans received 113,700C12. For which inventory do special accounting regulations apply, given its characteristics? Choose onea. unfinished construction under construction contractsb. delivery of goods by importc. unfinished delivery of auxiliary materialsd. combustible materialse. productsf. work in progressA13.Which of the following statements concerning the exchange of a tangible fixed asset for another asset is true?Choose onea. The cost of acquiring the asset received is equal to the carrying amount of the leased asset, less any payments made by the enterprise, plus the payment received by the company that leases the asset to the enterprise.b. If the asset is acquired for exchange with another non-monetary asset or with a combination of monetary and non-monetary assets, then the acquisition cost is the fair value of the leased assetc. If the asset is acquired in exchange for another non-monetary asset or a combination of monetary and non-monetary assets, then the acquisition cost is the fair value of the asset received if the transaction is of a non-commercial natured. A transaction is considered to be of a commercial nature if the cash flow scheme associated with the asset received, in terms of time, amount and risk, coincides with the cash flow scheme of the leased asset.e. If the fair value of the asset received cannot be determined, then the cost of acquisition is equal to the carrying amount of the leased asset, adjusted for cash payments.f. All these statements are not trueE14.Which of the following is NOT incoming cash flow from operating activities?Choose onea. Cash receipts from sale of productsb. Cash receipts of an insurance company from insurance premiumsc. Dividends received from holding companiesd. Cash receipts from commissionse. Interest received on loans from a financial institutionf. All specified cash inflows are from core businessC15.Which of the following methods for writing off inventories and determining the cost of sales is NOT eligible under International Financial Reporting Standards?Choose onea. last incoming, first outgoing priceb. all the listed assessment methods are acceptablec. method of specific identificationd. first incoming, first outgoing pricee. floating weighted average priceA16. The cancellation of impairment of materials reported in previous reporting periods may occur as:Choose onea. We debit the account "Impairment losses" and credit the account "Impairment of materials"b. We debit the "Materials" account and credit the "Materials Impairment" accountc. We debit the account "Impairment of materials" and credit the account "Other income"d. We debit the account "Impairment of materials" and credit the account "Recovered impairment"e. We debit the "Materials" account and credit the "Impairment losses" accountf. We debit the account "Impairment of materials" and credit the account "Impairment costs", but with negative amountsg. We debit the account "Impairment of materials" and credit the account "Materials"F17.If the fair value less costs to sell of an item of property, plant and equipment exceeds its carrying amount, it:Choose onea. its value in use must be determinedb. the present value of the deferred sale value must also be calculatedc. the asset is not impaired and it is not necessary to determine its value in used. it must be assumed that the asset is impairedC18. Research costs incurred by the enterprise:Choose onea. should be recognized as an intangible assetb. they must be recorded as current expenses for the period in which they are incurredc. should be accounted for as a reduction in development costsd. must be accounted for as an expense for future periodsB19.Which of the following information should NOT be disclosed in the notes to the financial statements based on International Financial Reporting Standards?Choose onea. management's estimates to determine accounting estimatesb. the basis for the preparation of the financial statements of the enterprisec. selected accounting policies of the enterprised. the total amount of dividends offered or declared prior to the approval of the financial statements for publication that were not recognized as a distribution of equity to owners for the periode. information required by International Financial Reporting Standards that is not presentedelsewhere in the financial statementsf. each of the above information must be disclosedg. the valuation base (s) used in the preparation of the financial statementsh. the judgments made by management in the process of implementing its accounting policiesD20. The issue of 95,000 ordinary shares with a nominal value of BGN 1 per share and an issue value of BGN 1.10 / share by an enterprise shall be accounted for with the following accounting item:Choose onea. Dt s / ka Share capital 95 000 and Dt s / ka Reserve from issue of shares 9 500; Kt Current account in BGN 104,500b. Dt s / ka Share capital 95 000; Kt s / ka Reserve from issue of shares 95 000c. Dt s / ka Current account in BGN 104,500; Kt s / ka Share capital 95 000 and Kt s / ka Reserve from issue of shares 9 500d. Dt s / ka Current account in BGN 104,500; Kt s / ka Share capital 104 500C21.Which of the following is NOT included in the group of cash and cash equivalents?Choose onea. all of the above are includedb. current account balancesc. cashd. investments in quarterly government securitiese. quarterly bank depositf. long-term blocked fundsF22.Which of the following statements concerning property, plant and equipment is NOT true? Choose onea. Borrowing costs are always capitalized in the amount of the property, plant and equipment acquiredb. Spare parts are usually accounted for as inventories and current consumption is accounted for when usedc. If appropriate, the entity may group insignificant assets separately and apply the criteria for recognizing property, plant and equipment to their total value.d. Tangible fixed assets acquired for security or environmental reasons may be recognized as separate property, plant and equipment.e. The costs of major inspections must be added (capitalized) to the carrying amount of property, plant and equipment if the recognition criteria are met.f. If basic spare parts and service equipment are used during more than one reporting period or only in connection with a tangible fixed asset, they are reported as property, plant and equipment.g. Expenses related to the daily maintenance of property, plant and equipment are recognized ascurrent for the period in which they are incurred.A23.Which of the following is not a non-current asset under International Financial Reporting Standards?Choose onea. investments in associatesb. income for future periodsc. facilitiesd. software productse. investment propertyf. improvements on the groundB24.Which of the following does not fall within the scope of financial accounting?Choose onea. there is no correct answerb. annual accounting closingc. preparation of financial statementsd. presentation of financial statementse. current accountingf. preparation of the annual budget of revenues and expendituresF25. Which of the following accounting items will be used to report the printer purchased for the needs of the marketing department, worth BGN 2,400, incl. 20% VAT, as the threshold for capitalization of properties, machinery and equipment is BGN 2,200:Choose onea. Dt s / ka Expenses for materials - assets below the value threshold 2 000 and Dt s / ka VAT purchases 400; Kt s / ka Current account in BGN 2,400b. Dt s / ka Material costs - assets below the value threshold 2,000; Kt s / ka Current account in BGN 2,000c. Dt s / ka Printer 2,000; Kt s / ka Current account in BGN 2,000d. Dt s / ka Expenses for acquisition of tangible fixed assets 2 400; Kt s / ka Current account in BGN 2,400A26.In most business transactions leading to a trade receivable, it is initially assessed:Choose onea. based on the exchange price agreed between the two parties to the transactionb. at its value in usec. at its reproductive valued. at its net realizable valuee. at its recoverable amountf. at its current value at the date of saleA27.Which statement about the net realizable value of inventories is NOT true?Choose onea. Net realizable value is always determined based on the market price of inventoriesb. For each subsequent period a new estimate of the net realizable value is madec. The impairment to net realizable value takes place on separate items of inventoriesd. The determination of net realizable value is based on an approximate accounting estimatee. The net realizable value depends on the contracts concluded by the enterprise, if anyf. When the conditions that led to the depreciation of inventories below their cost are no longer present, the previous value of the impaired inventories is re-adopted.g. The net realizable value is an indicator of the recoverable amount of inventories, given their liquidityh. The net realizable value depends on the selling expenses, which are specific and may be different for different companiesA28.Bulgarian accounting legislation does NOT include:Choose onea. Independent Financial Audit Actb. Accountancy Actc. Value Added Tax Actd. National accounting standardse. Law on the Public Offering of Securitiesf. Corporate Income Tax Actg. International Financial Reporting StandardsG29. The delivery value of purchased inventories does NOT include:Choose onea. finishing costsb. loading and unloading costsc. transport costsd. customs duties and taxese. purchase pricef. overhead costsg. commissions paid in connection with the purchaseF30.Which of the following does NOT belong to the minimum required information to be presented on the face of the statement of changes in equity in accordance with International Financial Reporting Standards?Choose onea. all of the above belong to the minimum required informationb. correction of significant errors from previous periods, if anyc. share capitald. revaluation reservee. retained earnings / uncovered lossf. premiums from the issue of shares / unitsg. reserves from recalculations in foreign currencyA31.Which of the following costs is not included in the cost of an asset in the group of property, plant and equipment?Choose onea. installation costsb. all listed costs are included in the acquisition price (cost)c. the estimated costs of dismantling and removing the asset and restoring the sited. delivery costse. the costs of site preparationf. import dutiesg. the cost of training staff to work with the asseth. purchase priceG32. Development costs incurred by the enterprise:Choose onea. are recognized as an asset and the cost of research is added to themb. are recognized as an asset only if they meet certain criteriac. are recognized as current expenses for the period in which they are incurredd. are recognized as a loss because the expected economic benefit against them is uncertaine. are recognized as deferred expensesB33.Which of the following costs are included in the cost of inventories?Choose onea. selling expensesb. non-production costs incurred in connection with bringing the inventories in the required conditionc. administrative costsd. input materials outside the norme. warehouse costsf. costs of exchange rate changesB34. An enterprise issues 10,000 ordinary shares with a nominal value of BGN 1 per share. The issue value is BGN 1.10 per share. The following accounting item must be prepared for theaccounting reflection of the issue:Choose onea. Cash debit account 11,000, Fixed capital credit account 10,000, Issue premiums credit account 1,000b. Debit account "Cash" 11 000, Credit account "Fixed capital" 10 000, Credit account "Additional capital" 1 000c. Cash debit account 10,000, Issue premiums debit account 1,000, Fixed capital credit account 11,000d. Cash debit account 11 000, Credit account "Income from operations with financial assets" 1 000, Credit account "Fixed capital" 10 000e. Debit account "Cash" 11 000, Credit account "Fixed capital" 11 000A35.Which of the following statements is NOT true?Choose onea. It is required to preserve the presentation and classification of the items in the financial statements during the reporting periodsb. Each significant class of related items must be presented separately in the financial statementsc. Revenues and expenses can be reimbursed only under certain conditionsd. All statements are truee. Instead of one statement of comprehensive income for the period, companies may submit two statements - a profit or loss statement for the year and a statement of comprehensive income.f. Comparative information for the previous reporting period is required for all digital informationg. The financial statements are presented at least once a yearh. The financial review by the management of the company is an integral part of its financial statements prepared on the basis of International Financial Reporting Standards.H36. The purchased machine is included in the fixed tangible assets of the enterprise under inventory number 124 and is accounted for at the acquisition price of BGN 96,400. The accounting of this business operation is:Choose onea. Dt s / ka Costs for acquisition of a machine 96 400; Kt s / ka Machine 96 400b. Dt s / ka Costs for acquisition of a machine 96 400; Kt s / ka Suppliers 96 400c. Dt s / ka Machine 96 400; Kt s / ka Costs for acquiring a machine 96 400d. Dt s / ka Machine 96 400; Kt s / ka Delivery 96 400C37.Which of the following accounting items are accrued dividends for BGN 3,700 in connection with the owned investments of the enterprise in subsidiaries:Choose onea. Dt s / ka Dividend receivables 3,700; Kt s / ka Dividend income 3,700b. Dt s / ka Dividend income 3,700; Kt s / ka Dividend receivables 3,700c. Dt s / ka Investments in subsidiaries 3,700; Kt s / ka Dividend income 3,700d. Dt s / ka Dividend receivables 3,700; Kt s / ka Investments in subsidiaries 3 700A38.Which of the following statements about the differences between financial (FS) and management accounting (MB) is NOT true?Choose onea. All statements are trueb. FS and MB solve different tasksc. FS and MB use different methodologies and procedural techniquesd. All statements are wronge. FS and MB use the same classification and analyticity of the reporting objectsf. The FS and the MB apply the same accounting methodg. FS and MB have the same subjectE39. The management of Jasmine AD prepares a draft financial statement on January 17, which is submitted for approval by the Board of Directors on February 25. The Board of Directors authorized the report for issue on February 25. Shareholders approve the financial statements on March 17. On March 5, a major customer of the company was declared bankrupt. In this regard, the company has taken one of the following actions:Choose onea. adjusts the disclosures in the financial statements in connection with the event and takes action to authorize the report for issuanceb. does not take any action related to the financial statementsc. adjusts the financial statement by depreciating the receivable from the client and warns the Board of Directors of the adjustments maded. adjusts the financial statement by depreciating the receivable from the client and takes new actions for re-authorization of the financial statement for issuancee. there is no correct answerD40. The accounting of the actual costs incurred for warranty service requires the compilation of the following accounting item:Choose onea. Debit account "Guarantee service provisions", Credit account "Cash"b. Debit account "Costs for provisions", Credit account "Provisions for warranty service"c. Debit account "Provisions for warranty service", Credit account "Expenses for provisions"d. Debit account "Cash", Credit account "Provisions for warranty service"e. All listed accounting items are wrongf. Debit account "Guarantee service provisions", Credit account "Other income"A41.Which of the following statements about inventories is NOT true?Choose onea. There are difficulties in quantitative measurement of inventories due to the various costs that form their value (cost)b. The classification of inventories must be consistent with the nature of the enterprise's operationsc. A problem in practice is the write-off of inventories when used in the activity, as there is a difference between the physical flow of inventories and value movements (flows)d. Inventories must be presented in the financial statements at the higher of their delivery value (cost) and their net realizable value.e. Inventories are directly related to liquidity and turnover, which characterize the production activity of the enterprisef. Inventories are material goods and they are materially responsibleD42.Which of the following statements concerning intangible assets is NOT true?Choose onea. Intangible assets are stated in the statement of financial position at their carrying amountb. When amortizing intangible assets, the straight-line method is mandatoryc. The cost of acquiring an intangible asset does not include the cost of training staff to work with the assetd. Intangible assets are subject to impairmente. Subsequent measurement of intangible assets may take place at historical cost or at revalued (fair) valueB43.Which of the following is NOT an incoming cash flow from financing activities for a manufacturing enterprise?Choose onea. Cash proceeds from bond issueb. All of these are cash inflows from financing activitiesc. Bank loan receivedd. Funding received under a European programe. Cash proceeds from the issue of sharesf. Payment received on the principal of a loan granted to an associateB44.Which of the listed assets is NOT included in the group of inventories?Choose onea. goodsb. materialsc. goods on the roadd. productse. semi-finished productsf. all of the listed assets are includedF45.Which of the following factors should not be taken into account when determining the useful life of property, plant and equipment?Choose onea. the expected use of the asset by the enterpriseb. the expected physical depletion of the assetc. the technical obsolescence of the assetd. the depreciable value of the assete. legal or other restrictions on the use of the assetf. the commercial obsolescence of the assetD46. On 01.09.2019 Maritza OOD received a loan in the amount of BGN 320,000. The loan is repayable in 16 equal quarterly installments. The first installment is due on December 1, 2019. All installments are made on the due date. How should the balance of the debt be presented as of 31.12. 2020 in the statement of financial position as of that date?Choose onea. as a non-current liability of BGN 80,000 and a current liability of BGN 140,000.b. there is no correct answerc. as a non-current liability BGN 220,000.d. as a non-current liability of BGN 140,000 and a current liability of BGN 80,000.e. as a current liability BGN 220,000.D47. The increase of the fixed capital cannot take place:Choose onea. against in-kind contribution of a partnerb. against the destruction of repurchased sharesc. through a new issue of sharesd. against repayment of an obligation of the enterprise to a suppliere. at the expense of retained earnings from previous yearsf. against the conversion of bonds into sharesD48.Which of the following is NOT an outflow of cash from operating activities?Choose onea. Cash payments of benefits from an insurance companyb. Dividends paidc. Cash payments to staffd. Cash payments to suppliers of goodse. Corporate tax paidf. Loans from a financial institutionF49.Which accounting item reflects a shareholder's contribution to the company's capital in the form of a building worth BGN 98,000, corresponding to subscribed but unpaid shares of the company?Choose onea. Dt s / ka Building 98 000; Kt s / ka Receivables on subscribed share contributions 98 000b. Dt s / ka Building 98 000; Kt s / ka Fixed capital 98 000c. Dt s / ka Share capital 79 000; Kt s / ka Building 98 000d. Dt s / ka Receivables on subscribed share contributions 98 000; Kt s / ka Building 98 000D50.Which of the following costs are included in the cost of inventories?Choose onea. warehouse costsb. costs of exchange rate changesc. non-production costs incurred in connection with bringing the inventories in the required conditiond. selling expensese. administrative costsf. input materials outside the normC。

Examination Problems for Fundamentals of Financial Management 2004-2005 (Paper B)overall goal in mind.A. Financial managementB. Profit maximizationC. Agency theoryD. Social responsibility2.A major disadvantage of the corporate form of organization is the ( ).A. double taxation of dividendsB. inability of the firm to raise large sums of additional capitalC. limited liability of shareholdersD. limited life of the corporate form.3. Interest paid (earned) on both the original principal borrowed (lent) and previous interest earned is often referred to as ( ).A. present valueB. simple interestC. future valueD. compound interest4. If the intrinsic value of a share of common stock is less than its market value, which of the following is the most reasonable conclusion?A. The stock has a low level of risk.B. The stock offers a high dividend payout ratio.C. The market is undervaluing the stock.D. The market is overvaluing the stock.5. A 250 face value share of preferred stock, pays a 20 annual dividend and investors require a 7% return on this investment. If the security is currently selling for 276, what is the difference (overvaluation) between its intrinsic and market value (rounded to the nearest whole dollar)?A. approximately 26B. approximately 10C. approximately 6D. approximately 16. Felton Farm Supplies, Inc., has an 8 percent return on total assets of 300,000 and a net profit margin of 5 percent. What are its sales?A. 3,750,000B. 480,000C. 300,000D. 1,500,0007. A company can improve (lower) its debt-to-total asset ratio by doing which of the following?A. Borrow more.B. Shift short-term to long-term debt.C. Shift long-term to short-term debt.D. isssue common stock.8. The DuPont Approach breaks down the earning power on shareholders' book value (ROE) as follows: ROE = ( ).A. Net profit margin × Total asset turnover × Equity multiplierB. Total asset turnover × Gross profit margin × Debt ratioC. Total asset turnover × Net profit marginD. Total asset turnover × Gross profit margin × Equity multiplier9. Which of the following items concerns financing decision? ( )A. sales forecastingB. bond issuingC. receivables collectionD. investment project selection10. Which of the following items is the function of a treasurer? ( )A. cost accountingB. internal controlC. capital budgetingD. general ledger11. For financial instruments, ( ) is judged in relation to the ability to sell a significant volume of securities in a short period of time without significant price concession.A. maturityB. marketabilityC. defaultD. inflation12. ( ) is the value at some future time of a present amount of money, or a series of payments, evaluated at a given interest rate.A. future valueB. present valueC. intrinsic valueD. market value13.Ellesmere Corporation issues 1 million $1 par value bonds. The stated interest rate is 6% per year and the interest is paid twice a year. What is the real interest rate of the bond? ( )A. 6%B.3%C. 12%D. (1+6%/2)2-114. Assume that dividends of a common stock will be maintained at D forever, and the required return of the stockholder is r, the par value of the stock is m, the value of the stock is ( )A. mB. m+DC. m+D/rD. D/r15. Which of the following items has the most risk? ( )A. treasury billB. corporate bondC. preferred stockD. common stock16. ( ) equals the gross profit divided by net sales of a firm.A. gross profit marginB. net profit marginC. return on investmentD. return on equity17. ( A ) is the ratios that measure a firm’s ability to meet short-term obligationsA. liquidity ratiosB. leverage ratios c. coverage ratios D. activity ratios18. ( A ) is the result of Net Profi t Margin × total asset turnover × (total assets/shareholders’ equity)A. Return on equityB. return on investmentC. current ratioD. quick ratio19. Government tax law adjustment is ( A ) to a firm.A. general economic riskB. inflation and deflation riskC. firm-specific riskD. international risk20 ( A ) equals the gross profit divided by net sales of a firm.A. gross profit marginB. net profit marginC. return on investmentD. return on equity II. Statement judgement (10 Points) (Please write your answer in the following1. Until around the first half of the 1900s, financial managers primarily raised funds and managed their firm’s cash positions. ( )2. In general, the higher the marketability of a security, the greater the yield necessary to attract investors ( )3. Discount Rate is the interest rate used to convert future values to present values. ( )4. The expected return of a portfolio is simply a weighted average of the expected return of the securities comprising that portfolio ( )5. The type of analysis varies according to the specific interests of the party involved ( )6. In a sole proprietorship, the owner is personally responsible for all financial obligations of thefirm. ( )7. When a stock goes "ex-rights, " its market price theoretically declines. ( )8. The market price of a particular bond is much greater today than it was yesterday. The calculated yield to maturity (YTM) based on today's market price would, therefore, be greater than the calculated YTM based on yesterday's market price. ( )9. A short average collection period assures us that accounts receivable are being efficiently managed. ( )10. Simple interest is interest that is paid on only the original amount borrowed (lent) ( )III. Questions (10 points) (Please write your answer on the answer paper)1. The method of depreciation does not alter the total amount deducted from income during the life of an asset. What does it alter and why is that important? (5 )2. What is primary and secondary market? (5)IV. Problems (60 Points) (Please write your answer on the answer paper)1. you need to have $100000 at the end of 10 years. To accumulate this sum, you have decided to save a certain amount at the end of each next 10 years and deposit it in the bank. The bank pays 8% interest compounded annually for long-term deposit. How much will you have to save each year? (PVIF(8%,10)=0.463, PVIFA(8%,10)=0.671, FVIF(8%,10)=2.159, FVIFA(8%,10)=14.487)2.Just today, Bird Seed Company’s common stock paid a $1.50 annual dividend per share and hada closing price of $24. Assume that the market’s required return for this investment is 12% and that dividends are expected to grow at a constant rate forever.a. calculate the implied growth rate in dividends.b. what is expected dividend yield and capital gains yield?3. The data for various companies in the same industry are as follows: (amounts are in millionDetermine the total asset turnover, net profit margin, and write your computation result in the table.4. You expect to deposit the following cash flows at the end of years 1 through 5, 1,000; 4,000; 9,000; 5,000; and 2,000 respectively. Alternatively, you could deposit a single amount today at the beginning of year 1 (end of year 0). How much is the single deposit needed to be today if you can earn 10% compounded annually? (10/ )5.Stock A has an expected growth rate of 16% for the first 3 years and 8% thereafter. Each share of stock just received an annual 3.24 dividend per share. The appropriate discount rate is 15%.What is the value of the common stock under this scenario? (10/ )6. The following common stocks are available for investment:COMMON STOCK (TICKER SYMBOL) BETANanyang Business Systems (NBS) 1.40Yunnan Garden Supply, Inc. (YUWHO) .80Bird Nest Soups Company (SLURP) .60! (WACHO) 1.80Park City Cola Company (BURP) 1.05Oldies Records, Ltd. (SHABOOM) .90a. If you invest 20 percent of your funds in each of the first four securities, and 10 percent in each of the last two, what is the beta of your portfolio? (5/ )b. If the risk-free rate is 8 percent and the expected return on the market portfolio is 14 percent, what will be the portfolio's expected return? (5/ )Solutions (B)1. Depreciation changes the timing of tax payments. The longer these payments can be delayed, the better off the business is.2. A primary market is a “new issues” market. Here, funds raised through the sale of new securities flow from ultimate savers to the ultimate investors in real assetsIn a secondary market, existing securities are bought and sold. Transactions in these already existing securities do not provide additional funds to finance capital investmentIV. Problems (60 Points) (Please write your answer on the answer paper)1. Answer:100000=A FVIF(8%,10)=14.487A A=100000/14.487=69032. Answer:a. 24=1.5(1+g)/(0.12-g), g=0.054b. dividend yield=0.12-g=0.066, capital gains yield=0.0541. (10/ ) Many different methods to lead to a correct solution.PV of this mixed flows problem = 1,000(PVIF10%,1) + 4,000(PVIF10%,2) + 9,000(PVIF10%,3) + 5,000(PVIF10%,4) + 2,000(PVIF10%,5) = 15,633.62.5. (1) Determine the annual dividends.D0 = $3.24 (this has been paid already)D1 = D0(1+g1)1 = $3.24(1.16)1 =3.76D2 = D0(1+g1)2 = $3.24(1.16)2 =4.36D3 = D0(1+g1)3 = $3.24(1.16)3 =5.06D4 = D3(1+g2)1 = $5.06(1.08)1 =5.46P3 = 5.46 / (.15 - .08) = $78 [CG Model](2) Determine the PV of cash flows.PV(D1) = D1(PVIF15%, 1) = 3.76 (.870) = 3.27PV(D2) = D2(PVIF15%, 2) = 4.36 (.756) = 3.30PV(D3) = D3(PVIF15%, 3) = 5.06 (.658) = 3.33PV(P3) = P3(PVIF15%, 3) = 78 (.658) = 51.32(3) Calculate the intrinsic value by summing all the cash flow present values.V = 3.27 + 3.30 + 3.33 + 51.326. a) (5/) The beta of a portfolio is simply a weighted average of the betas of the individual securities that make up the portfolio.TICKER SYMBOL BETA PROPORTION WEIGHTED BETANBS 1.40 .2 .280YUWHO .80 .2 .160SLURP .60 .2 .120W ACHO 1.80 .2 .360BURP 1.05 .1 .105SHABOOM .90 .1 .0901.0 1.115The portfolio beta is 1.115.b) (5/ ) Expected portfolio return=.08 + (.14 - .08)(1.115)= .08 + .0669 = .1469 or 14.69%。

财务类英语试题及答案一、选择题（每题1分，共10分）1. Which of the following is a common financial statement?A. Balance SheetB. Income StatementC. Cash Flow StatementD. All of the above2. The term "equity" in finance refers to:A. Money owed to a company.B. Money invested in a company.C. Money earned by a company.D. Money spent by a company.3. What is the formula for calculating the return on investment (ROI)?A. ROI = (Net Income / Total Assets) * 100B. ROI = (Total Assets / Net Income) * 100C. ROI = (Net Profit / Cost of Investment) * 100D. ROI = (Cost of Investment / Net Profit) * 1004. The process of forecasting a company's future financial position is known as:A. BudgetingB. ForecastingC. PlanningD. Analysis5. Which of the following is not a type of financial risk?A. Credit riskB. Market riskC. Liquidity riskD. Fixed risk6. The term "leverage" in finance is used to describe:A. The use of borrowed money to increase potential returns.B. The process of selling a financial asset.C. The amount of money a company has in the bank.D. The ratio of a company's equity to its debt.7. What does "EBIT" stand for in financial analysis?A. Earnings Before Interest and TaxesB. Earnings Before Income and TaxesC. Earnings Before Interest and TotalD. Earnings Before Interest, Taxes, and Depreciation8. The "time value of money" concept implies that:A. Money received in the future is worth less than money received today.B. Money received in the past is worth more than money received today.C. Money has no value over time.D. The value of money is constant over time.9. Which of the following is a method of financial analysis?A. SWOT analysisB. PEST analysisC. Ratio analysisD. Porter's Five Forces analysis10. The "break-even point" in finance is the point at which:A. A company's revenue equals its expenses.B. A company's net income is zero.C. A company's assets equal its liabilities.D. A company's cash flow is positive.答案：1. D2. B3. C4. B5. D6. A7. A8. A9. C10. A二、填空题（每题1分，共5分）11. The __________ is a financial statement that shows a company's assets, liabilities, and equity at a particular point in time.Answer: Balance Sheet12. The __________ is the difference between revenue and expenses during a specific period.Answer: Net Income13. In finance, the term "capital" often refers to the__________ of the business.Answer: Owners' Equity14. If a company's current assets are greater than itscurrent liabilities, it is said to have a positive __________. Answer: Working Capital15. The __________ is a measure of how well a company can pay its current debts.Answer: Quick Ratio三、简答题（每题5分，共10分）16. What is the purpose of a financial statement analysis?Answer: The purpose of financial statement analysis is to assess the performance and financial health of a company. It helps investors, creditors, and other stakeholders to make informed decisions about the company's financial stability, profitability, and risk.17. Explain the difference between "operating activities" and "financing activities" in the context of a cash flow statement.Answer: Operating activities in a cash flow statement referto the cash transactions that are directly related to thecore business operations of the company, such as cashreceived from sales and cash paid for expenses. Financing activities, on the other hand, involve cash transactions related to the company's financing arrangements, such as issuing or repaying debt, issuing or buying back shares, and paying dividends.四、计算题（每题5分，共5分）18. If a company has a net profit of $100,000 and a cost of investment of $500,000, what is the ROI?Answer: ROI = (Net Profit / Cost of Investment) * 100ROI = (100,000 / 500,000) * 100ROI = 20%五、论述题（每题10分，共10分）19. Discuss the importance of financial planning in business management.Answer: Financial planning is a critical component of business management as it helps in setting financial goals, allocating resources efficiently, and forecasting。

CHAPTER 8 MANAGEMENT OF TRANSACTION EXPOSURE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMSQUESTIONS1. How would you define transaction exposure? How is it different from economic exposure?Answer: Transaction exposure is the sensitivity of realized domestic currency values of the firm’s contractual cash flows denominated in foreign currencies to unexpected changes in exchange rates. Unlike economic exposure, transaction exposure is well-defined and short-term.2. Discuss and compare hedging transaction exposure using the forward contract vs. money market instruments. When do the alternative hedging approaches produce the same result?Answer: Hedging transaction exposure by a forward contract is achieved by selling or buying foreign currency receivables or payables forward. On the other hand, money market hedge is achieved by borrowing or lending the present value of foreign currency receivables or payables, thereby creating offsetting foreign currency positions. If the interest rate parity is holding, the two hedging methods are equivalent.3. Discuss and compare the costs of hedging via the forward contract and the options contract.Answer: There is no up-front cost of hedging by forward contracts. In the case of options hedging, however, hedgers should pay the premiums for the contracts up-front. The cost of forward hedging, however, may be realized ex post when the hedger regrets his/her hedging decision.4. What are the advantages of a currency options contract as a hedging tool compared with the forward contract?Answer: The main advantage of using options contracts for hedging is that the hedger can decide whether to exercise options upon observing the realized future exchange rate. Options thus provide a hedge against ex post regret that forward hedger might have to suffer. Hedgers can only eliminate the downside risk while retaining the upside potential.5. Suppose your company has purchased a put option on the German mark to manage exchange exposure associated with an account receivable denominated in that currency. In this case, your company can be said to have an ‘insurance’ policy on its receivable. Explain in what sense this is so.Answer: Your company in this case knows in advance that it will receive a certain minimum dollar amount no matter what might happen to the $/€ exchange rate. Furthermore, if the German mark appreciates, your company will benefit from the rising euro.6. Recent surveys of corporate exchange risk management practices indicate that many U.S. firms simply do not hedge. How would you explain this result?Answer: There can be many possible reasons for this. First, many firms may feel that they are not really exposed to exchange risk due to product diversification, diversified markets for their products, etc. Second, firms may be using self-insurance against exchange risk. Third, firms may feel that shareholders can diversify exchange risk themselves, rendering corporate risk management unnecessary.7. Should a firm hedge? Why or why not?Answer: In a perfect capital market, firms may not need to hedge exchange risk. But firms can add to their value by hedging if markets are imperfect. First, if management knows about the firm’s exposure better than shareholders, the firm, not it s shareholders, should hedge. Second, firms may be able to hedge at a lower cost. Third, if default costs are significant, corporate hedging can be justifiable because it reduces the probability ofdefault. Fourth, if the firm faces progressive taxes, it can reduce tax obligations by hedging which stabilizes corporate earnings.8. Using an example, discuss the possible effect of hedging on a firm’s tax obligations.Answer: One can use an example similar to the one presented in the chapter.9. Explain contingent exposure and discuss the advantages of using currency options to manage this type of currency exposure.Answer: Companies may encounter a situation where they may or may not face currency exposure. In this situation, companies need options, not obligations, to buy or sell a given amount of foreign exchange they may or may not receive or have to pay. If companies either hedge using forward contracts or do not hedge at all, they may face definite currency exposure.10. Explain cross-hedging and discuss the factors determining its effectiveness.Answer: Cross-hedging involves hedging a position in one asset by taking a position in another asset. The effectiveness of cross-hedging would depend on the strength and stability of the relationship between the two assets.PROBLEMS1. Cray Research sold a super computer to the Max Planck Institute in Germany on credit and invoiced €10 million payable in six months. Currently, the six-month forward exchange rate is $1.10/€ and the foreign exchange advisor for Cray Research predicts that the spot rate is likely to be $1.05/€ in six months.(a) What is the expected gain/loss from the forward hedging?(b) If you were the financial manager of Cray Research, would you recommend hedging this euro receivable? Why or why not?(c) Suppose the foreign exchange advisor predicts that the future spot rate will be the same as the forward exchange rate quoted today. Would you recommend hedging in this case? Why or why not?Solution: (a) Expected gain($) = 10,000,000(1.10 – 1.05)= 10,000,000(.05)= $500,000.(b) I would recommend hedging because Cray Research can increase the expected dollar receipt by $500,000 and also eliminate the exchange risk.(c) Since I eliminate risk without sacrificing dollar receipt, I still would recommend hedging.2. IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed ¥250 million payable in three months. Currently, the spot exchange rate is ¥105/$ and the three-month forward rate is ¥100/$. The three-month money market interest rate is 8 percent per annum in the U.S. and 7 percent per annum in Japan. The management of IBM decided to use the money market hedge to deal with this yen account payable.(a) Explain the process of a money market hedge and compute the dollar cost of meeting the yen obligation.(b) Conduct the cash flow analysis of the money market hedge.Solution: (a). Let’s first compute the PV of ¥250 million, i.e.,250m/1.0175 = ¥245,700,245.7So if the above yen amount is invested today at the Japanese interest rate for three months, the maturity value will be exactly equal to ¥25 million which is the amount of payable. To buy the above yen amount today, it will cost:$2,340,002.34 = ¥250,000,000/105.The dollar cost of meeting this yen obligation is $2,340,002.34 as of today.(b)___________________________________________________________________Transaction CF0 CF1____________________________________________________________________1. Buy yens spot -$2,340,002.34with dollars ¥245,700,245.702. Invest in Japan - ¥245,700,245.70¥250,000,0003. Pay yens - ¥250,000,000Net cash flow - $2,340,002.34____________________________________________________________________3. You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the total cost of SF 5,000 for lodging, meals and transportation during your stay. As of today, the spot exchange rate is $0.60/SF and the three-month forward rate is $0.63/SF. You can buy the three-month call option on SF with the exercise rate of $0.64/SF for the premium of $0.05 per SF. Assume that your expected future spot exchange rate is the same as the forward rate. The three-month interest rate is 6 percent per annum in the United States and 4 percent per annum in Switzerland. (a) Calculate your expected dollar cost of buying SF5,000 if you choose to hedge via call option on SF.(b) Calculate the future dollar cost of meeting this SF obligation if you decide to hedge using a forward contract.(c) At what future spot exchange rate will you be indifferent between the forward and option market hedges?(d) Illustrate the future dollar costs of meeting the SF payable against the future spot exchange rate under both the options and forward market hedges.Solution: (a) Total option premium = (.05)(5000) = $250. In three months, $250 is worth $253.75 = $250(1.015). At the expected future spot rate of $0.63/SF, which is less than the exercise price, you don’t expect to exercise options. Rather, you expect to buy Swiss franc at $0.63/SF. Since you are going to buy SF5,000, you expect to spend $3,150 (=.63x5,000). Thus, the total expected cost of buying SF5,000 will be the sum of $3,150 and $253.75, i.e., $3,403.75.(b) $3,150 = (.63)(5,000).(c) $3,150 = 5,000x + 253.75, where x represents the break-even future spot rate. Solving for x, we obtain x = $0.57925/SF. Note that at the break-even future spot rate, options will not be exercised.(d) If the Swiss franc appreciates beyond $0.64/SF, which is the exercise price of call option, you will exercise the option and buy SF5,000 for $3,200. The total cost of buying SF5,000 will be $3,453.75 = $3,200 + $253.75.This is the maximum you will pay.4. Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be billed €20 million which is payable in one year. The current spot exchange rate is $1.05/€ and the one -year forward rate is $1.10/€. The annual interest rat e is 6.0% in the U.S. and5.0% in France. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like to hedge exchange exposure.(a) It is considering two hedging alternatives: sell the euro proceeds from the sale forward or borrow euros from the Credit Lyonnaise against the euro receivable. Which alternative would you recommend? Why?(b) Other things being equal, at what forward exchange rate would Boeing be indifferent between the two hedging methods?Solution: (a) In the case of forward hedge, the future dollar proceeds will be (20,000,000)(1.10) = $22,000,000. In the case of money market hedge (MMH), the firm has to first borrow the PV of its euro receivable, i.e., 20,000,000/1.05 =€19,047,619. Then the firm should exchange this euro amount into dollars at the current spot rate to receive: (€19,047,619)($1.05/€) = $20,000,000, which can be invested at the dollar interest rate $ Cost Options hedge Forward hedge $3,453.75 $3,150 0 0.579 0.64 (strike price) $/SF$253.75for one year to yield:$20,000,000(1.06) = $21,200,000.Clearly, the firm can receive $800,000 more by using forward hedging.(b) According to IRP, F = S(1+i$)/(1+i F). Thus the “indifferent” forward rate will be:F = 1.05(1.06)/1.05 = $1.06/€.5. Suppose that Baltimore Machinery sold a drilling machine to a Swiss firm and gave the Swiss client a choice of paying either $10,000 or SF 15,000 in three months.(a) In the above example, Baltimore Machinery effectively gave the Swiss client a free option to buy up to $10,000 dollars using Swiss franc. What is the ‘implied’ exercise exchange rate?(b) If the spot exchange rate turns out to be $0.62/SF, which currency do you think the Swiss client will choose to use for payment? What is the value of this free option for the Swiss client?(c) What is the best way for Baltimore Machinery to deal with the exchange exposure?Solution: (a) The implied exercise (price) rate is: 10,000/15,000 = $0.6667/SF.(b) If the Swiss client chooses to pay $10,000, it will cost SF16,129 (=10,000/.62). Since the Swiss client has an option to pay SF15,000, it will choose to do so. The value of this option is obviously SF1,129 (=SF16,129-SF15,000).(c) Baltimore Machinery faces a contingent exposure in the sense that it may or may not receive SF15,000 in the future. The firm thus can hedge this exposure by buying a put option on SF15,000.6. Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry. PCC owes Mitsubishi Heavy Industry 500 million yen in one year. The current spot rate is 124 yen per dollar and the one-year forward rate is 110 yen per dollar. The annual interest rate is 5% in Japan and 8% in the U.S. PCC can also buy a one-year call option on yen at the strike price of $.0081 per yen for a premium of .014 cents per yen.(a) Compute the future dollar costs of meeting this obligation using the money market hedgeand the forward hedges.(b) Assuming that the forward exchange rate is the best predictor of the future spot rate, compute the expected future dollar cost of meeting this obligation when the option hedge is used.(c) At what future spot rate do you think PCC may be indifferent between the option and forward hedge?Solution: (a) In the case of forward hedge, the dollar cost will be 500,000,000/110 = $4,545,455. In the case of money market hedge, the future dollar cost will be: 500,000,000(1.08)/(1.05)(124)= $4,147,465.(b) The option premium is: (.014/100)(500,000,000) = $70,000. Its future value will be $70,000(1.08) = $75,600.At the expected future spot rate of $.0091(=1/110), which is higher than the exercise of $.0081, PCC will exercise its call option and buy ¥500,000,000 for $4,050,000 (=500,000,000x.0081).The total expected cost will thus be $4,125,600, which is the sum of $75,600 and $4,050,000.(c) When the option hedge is used, PCC will spend “at most” $4,125,000. On the other hand, when the forward hedging is used, PCC will have to spend $4,545,455 regardless of the future spot rate. This means that the options hedge dominates the forward hedge. At no future spot rate, PCC will be indifferent between forward and options hedges.7. Airbus sold an aircraft, A400, to Delta Airlines, a U.S. company, and billed $30 million payable in six months. Airbus is concerned with the euro proceeds from international sales and would like to control exchange risk. The current spot exchange rate is $1.05/€ and six-month forward exchange rate is $1.10/€ at the moment. Airbus can buy a six-month put option on U.S. dollars with a strike price of €0.95/$ for a premium of €0.02 per U.S. dollar. Currently, six-month interest rate is 2.5% in the euro zone and 3.0% in the U.S.pute the guaranteed euro proceeds from the American sale if Airbus decides to hedgeusing a forward contract.b.If Airbus decides to hedge using money market instruments, what action does Airbusneed to take? What would be the guaranteed euro proceeds from the American sale in this case?c.If Airbus decides to hedge using put options on U.S. dollars, what would be the‘expected’ euro proceeds from the American sale? Assume that Airbus regards the current forward exchange rate as an unbiased predictor of the future spot exchange rate.d.At what future spot exchange rate do you think Airbus will be indifferent between theoption and money market hedge?Solution:a. Airbus will sell $30 million forward for €27,272,727 = ($30,000,000) / ($1.10/€).b. Airbus will borrow the present value of the dollar receivable, i.e., $29,126,214 = $30,000,000/1.03, and then sell the dollar proceeds spot for euros: €27,739,251. This is the euro amount that Airbus is going to keep.c. Since the expected future spot rate is less than the strike price of the put option, i.e., €0.9091< €0.95, Airbus expects to exercise the option and receive €28,500,000 = ($30,000,000)(€0.95/$). This is gross proceeds. Airbus spent €600,000 (=0.02x30,000,000) upfront for the option and its future cost is equal to €615,000 = €600,000 x 1.025. Thus the net euro proceeds from the American sale is €27,885,000, which is the difference between the gross proceeds and the option costs.d. At the indifferent future spot rate, the following will hold:€28,432,732 = S T (30,000,000) - €615,000.Solving for S T, we obtain the “indifference” future spot exchange rate, i.e., €0.9683/$, or $1.0327/€. Note that €28,432,732 is the future value of the proceed s under money market hedging:€28,432,732 = (€27,739,251) (1.025).Suggested solution for Mini Case: Chase Options, Inc.[See Chapter 13 for the case text]Chase Options, Inc.Hedging Foreign Currency Exposure Through Currency OptionsHarvey A. PoniachekI. Case SummaryThis case reviews the foreign exchange options market and hedging. It presents various international transactions that require currency options hedging strategies by the corporations involved. Seven transactions under a variety of circumstances are introduced that require hedging by currency options. The transactions involve hedging of dividend remittances, portfolio investment exposure, and strategic economic competitiveness. Market quotations are provided for options (and options hedging ratios), forwards, and interest rates for various maturities.II. Case Objective.The case introduces the student to the principles of currency options market and hedging strategies. The transactions are of various types that often confront companies that are involved in extensive international business or multinational corporations. The case induces students to acquire hands-on experience in addressing specific exposure and hedging concerns, including how to apply various market quotations, which hedging strategy is most suitable, and how to address exposure in foreign currency through cross hedging policies.III. Proposed Assignment Solution1. The company expects DM100 million in repatriated profits, and does not want the DM/$ exchange rate at which they convert those profits to rise above 1.70. They can hedge this exposure using DM put options with a strike price of 1.70. If the spot rate rises above 1.70, they can exercise the option, while if that rate falls they can enjoy additionalprofits from favorable exchange rate movements.To purchase the options would require an up-front premium of:DM 100,000,000 x 0.0164 = DM 1,640,000.With a strike price of 1.70 DM/$, this would assure the U.S. company of receiving at least:DM 100,000,000 – DM 1,640,000 x (1 + 0.085106 x 272/360)= DM 98,254,544/1.70 DM/$ = $57,796,791by exercising the option if the DM depreciated. Note that the proceeds from the repatriated profits are reduced by the premium paid, which is further adjusted by the interest foregone on this amount.However, if the DM were to appreciate relative to the dollar, the company would allow the option to expire, and enjoy greater dollar proceeds from this increase.Should forward contracts be used to hedge this exposure, the proceeds received would be: DM100,000,000/1.6725 DM/$ = $59,790,732,regardless of the movement of the DM/$ exchange rate. While this amount is almost $2 million more than that realized using option hedges above, there is no flexibility regarding the exercise date; if this date differs from that at which the repatriate profits are available, the company may be exposed to additional further current exposure. Further, there is no opportunity to enjoy any appreciation in the DM.If the company were to buy DM puts as above, and sell an equivalent amount in calls with strike price 1.647, the premium paid would be exactly offset by the premium received. This would assure that the exchange rate realized would fall between 1.647 and 1.700. If the rate rises above 1.700, the company will exercise its put option, and if it fell below 1.647, the other party would use its call; for any rate in between, both options wouldexpire worthless. The proceeds realized would then fall between:DM 100,00,000/1.647 DM/$ = $60,716,454andDM 100,000,000/1.700 DM/$ = $58,823,529.This would allow the company some upside potential, while guaranteeing proceeds at least $1 million greater than the minimum for simply buying a put as above.Buy/Sell OptionsDM/$Spot Put Payoff “Put”ProfitsCallPayoff“Call”Profits Net Profit1.60(1,742,846)01,742,84660,716,45460,716,4541.61(1,742,846)01,742,84660,716,45460,716,4541.62(1,742,846)01,742,84660,716,45460,716,454 1.63(1,742,846)01,742,84660,716,45460,716,4541.64(1,742,846)01,742,84660,716,45460,716,4541.65(1,742,846)60,606,0611,742,846060,606,061 1.66(1,742,846)60,240,9641,742,846060,240,9641.67(1,742,846)59,880,241,742,846059,880,240 1.68(1,742,846)59,523,811,742,846059,523,8101.69(1,742,846)59,171,591,742,846059,171,59881,742,846058,823,529 1.70(1,742,846)58,823,5291.71(1,742,846)58,823,521,742,846058,823,52991,742,846058,823,529 1.72(1,742,846)58,823,5291.73(1,742,846)58,823,521,742,846058,823,52991.74(1,742,846)58,823,521,742,846058,823,52991.75(1,742,846)58,823,521,742,846058,823,52991,742,846058,823,529 1.76(1,742,846)58,823,5291,742,846058,823,529 1.77(1,742,846)58,823,5291,742,846058,823,529 1.78(1,742,846)58,823,5291,742,846058,823,529 1.79(1,742,846)58,823,5291,742,846058,823,529 1.80(1,742,846)58,823,5291,742,846058,823,529 1.81(1,742,846)58,823,5291.82(1,742,846)58,823,521,742,846058,823,52991.83(1,742,846)58,823,521,742,846058,823,5291.84(1,742,846)58,823,521,742,846058,823,52991,742,846058,823,529 1.85(1,742,846)58,823,529Since the firm believes that there is a good chance that the pound sterling will weaken, locking them into a forward contract would not be appropriate, because they would lose the opportunity to profit from this weakening. Their hedge strategy should follow for an upside potential to match their viewpoint. Therefore, they should purchase sterling call options, paying a premium of:5,000,000 STG x 0.0176 = 88,000 STG.If the dollar strengthens against the pound, the firm allows the option to expire, and buys sterling in the spot market at a cheaper price than they would have paid for a forward contract; otherwise, the sterling calls protect against unfavorable depreciation of the dollar.Because the fund manager is uncertain when he will sell the bonds, he requires a hedge which will allow flexibility as to the exercise date. Thus, options are the best instrument for him to use. He can buy A$ puts to lock in a floor of 0.72 A$/$. Since he is willing to forego any further currency appreciation, he can sell A$ calls with a strike price of 0.8025 A$/$ to defray the cost of his hedge (in fact he earns a net premium of A$ 100,000,000 x (0.007234 –0.007211) = A$ 2,300), while knowing that he can’t receive less than 0.72 A$/$ when redeeming his investment, and can benefit from a small appreciation of the A$.Example #3:Problem: Hedge principal denominated in A$ into US$. Forgo upside potential to buy floor protection.I. Hedge by writing calls and buying puts1) Write calls for $/A$ @ 0.8025Buy puts for $/A$ @ 0.72# contracts needed = Principal in A$/Contract size100,000,000A$/100,000 A$ = 1002) Revenue from sale of calls = (# contracts)(size of contract)(premium)$75,573 = (100)(100,000 A$)(.007234 $/A$)(1 + .0825 195/360)3) Total cost of puts = (# contracts)(size of contract)(premium)$75,332 = (100)(100,000 A$)(.007211 $/A$)(1 + .0825 195/360) 4) Put payoffIf spot falls below 0.72, fund manager will exercise putIf spot rises above 0.72, fund manager will let put expire5) Call payoffIf spot rises above .8025, call will be exercised If spot falls below .8025, call will expire6) Net payoffSee following Table for net payoffAustralian Dollar Bond HedgeStrikePrice Put Payoff “Put”PrincipalCallPayoff“Call”Principal Net Profit0.60(75,332)72,000,0075,573072,000,2410.61(75,332)72,000,0075,573072,000,2410.62(75,332)72,000,0075,573072,000,2410.63(75,332)72,000,0075,573072,000,2410.64(75,332)72,000,0075,573072,000,2410.65(75,332)72,000,0075,573072,000,2410.66(75,332)72,000,0075,573072,000,2410.67(75,332)72,000,0075,573072,000,2410.68(75,332)72,000,0075,573072,000,2410.69(75,332)72,000,0075,573072,000,2410.70(75,332)72,000,0075,573072,000,2410.71(75,332)72,000,0075,573072,000,2410.72(75,332)72,000,0075,573072,000,2410.73(75,332)73,000,0075,573073,000,2410.74(75,332)74,000,0075,573074,000,2410.75(75,332)75,000,0075,573075,000,2410.76(75,332)76,000,0075,573076,000,24175,573077,000,2410.77(75,332)77,000,000.78(75,332)78,000,0075,573078,000,24175,573079,000,2410.79(75,332)79,000,000.80(75,332)80,000,0075,573080,000,24180,250,2410.81(75,332)075,57380,250,000.82(75,332)075,57380,250,0080,250,24180,250,2410.83(75,332)075,57380,250,000.84(75,332)075,57380,250,0080,250,24180,250,2410.85(75,332)075,57380,250,004. The German company is bidding on a contract which they cannot be certain of winning. Thus, the need to execute a currency transaction is similarly uncertain, and using a forward or futures as a hedge is inappropriate, because it would force them to perform even if they do not win the contract.Using a sterling put option as a hedge for this transaction makes the most sense. For a premium of:12 million STG x 0.0161 = 193,200 STG,they can assure themselves that adverse movements in the pound sterling exchange rate will not diminish the profitability of the project (and hence the feasibility of their bid),while at the same time allowing the potential for gains from sterling appreciation.5. Since AMC in concerned about the adverse effects that a strengthening of the dollar would have on its business, we need to create a situation in which it will profit from such an appreciation. Purchasing a yen put or a dollar call will achieve this objective. The data in Exhibit 1, row 7 represent a 10 percent appreciation of the dollar (128.15 strike vs. 116.5 forward rate) and can be used to hedge against a similar appreciation of the dollar.For every million yen of hedging, the cost would be:Yen 100,000,000 x 0.000127 = 127 Yen.To determine the breakeven point, we need to compute the value of this option if the dollar appreciated 10 percent (spot rose to 128.15), and subtract from it the premium we paid. This profit would be compared w ith the profit earned on five to 10 percent of AMC’s sales (which would be lost as a result of the dollar appreciation). The number of options to be purchased which would equalize these two quantities would represent the breakeven point.Example #5:Hedge the economic cost of the depreciating Yen to AMC.If we assume that AMC sales fall in direct proportion to depreciation in the yen (i.e., a 10 percent decline in yen and 10 percent decline in sales), then we can hedge the full value of AMC’s sales. I hav e assumed $100 million in sales.1) Buy yen puts# contracts needed = Expected Sales *Current ¥/$ Rate / Contract size9600 = ($100,000,000)(120¥/$) / ¥1,250,0002) Total Cost = (# contracts)(contract size)(premium)$1,524,000 = (9600)( ¥1,250,000)($0.0001275/¥)3) Floor rate = Exercise – Premium128.1499¥/$ = 128.15¥/$ - $1,524,000/12,000,000,000¥4) The payoff changes depending on the level of the ¥/$ rate. The following tablesummarizes the payoffs. An equilibrium is reached when the spot rate equals the floor rate.AMC ProfitabilityYen/$ Spot Put Payoff Sales Net Profit 120(1,524,990)100,000,00098,475,010 121(1,524,990)99,173,66497,648,564 122(1,524,990)98,360,65696,835,666 123(1,524,990)97,560,97686,035,986 124(1,524,990)96,774,19495,249,204 125(1,524,990)96,000,00094,475,010 126(1,524,990)95,238,09593,713,105 127(847,829)94,488,18993,640,360 128(109,640)93,750,00093,640,360 129617,10493,023,25693,640,360 1301,332,66892,307,69293,640,360 1312,037,30791,603,05393,640,360 1322,731,26990,909,09193,640,360 1333,414,79690,225,66493,640,360 1344,088,12289,552,23993,640,360 1354,751,43188,888,88993,640,360 1365,405,06688,235,29493,640,360 1376,049,11887,591,24193,640,360 1386,683,83986,966,52293,640,360 1397,308,42586,330,93693,640,360 1407,926,07585,714,28693,640,360 1418,533,97785,106,38393,640,360 1429,133,31884,507,04293,640,360 1439,724,27683,916,08493,640,360 14410,307,02783,333,33393,640,360 14510,881,74082,758,62193,640,360 14611,448,57982,191,78193,640,360。

财务管理基础课后作业答案第一章财务治理概述一、单项选择题1-5：A D D C D 6-10：DC二、多项选择题1、BCD 2．ABCD 3. ACD 4、 ABCD 5、ACD三、判定题1-5：×××××第二章财务治理环境一、单项选择题：1-5：CADCB二、多项选择题：1、AD2、AC3、BDE4、BCD5、BCD6、ABC7、BD8、BCD三、判定题：1-6：××√√√√第三章财务估价一：单项选择题：1-5：BACDA 6-10：AABDD11-15：BBDCB 16-20：ADDB二、多项选择题1、ABD2、BCD3、AC4、ACD5、ACD6、AB三、判定题1-5：√×√√√ 6—10：××√×× 11-12：√√四、运算分析题1、解答：预付年金现值系数与一般年金现值系数关系：期数－1，系数＋1有：P＝500×{（P/A,10%,10-1)+1}＝500×（5.7590＋1）＝3379.53379.5<3600，故租赁该设备2、解答:（1）P=120×（P/A，5%，8）=120×6.4632=775.584（万元）(不能够还清贷款) （2）A=800/(P/A,5%,8)=1 000/6.4632=123.7777（万元）3.解答：(1)运算两个项目净现值的期望值A项目：200×0.2+100×0.6十50×0.2=110 (万元)B项目：300×0.2+100×0.6+(-50) ×0.2=110(万元)(2)运算两个项目期望值的标准离差σA= [(200-110)2× 0.2+(100-110)2× 0.6+(50-110)2×0.2]1/2 =48.99σB= [(300-110)2× 0.2+(100-110)2×0.6+(-50-110)2×0.2]1/2 =111.36(3)判定A 、B 两个投资项目的优劣由于A 、B 两个项目投资额相同，期望收益亦相同，而A 项目风险相对较小(其标准离差小于B 项目)，故A 项目优于B 项目。