October 2021 self-test 00150 Financial theory and practice questions and answers


Directions: For this part, you are allowed 30 minutes to write an essay on the theory and Practice of Finance in the self-study Examination for Higher Education in October 2021.1. Typical indirect financing activities are (A) A. Deposits and loans of commercial banks B.C. leasing business of leasing companies D. Property insurance business of insurance companies 2.The determining interest rate in the presence of multiple interest rates is (C) a. nominal interest rate B.3. The theoretical basis of absolute purchasing power parity is (B) A.C. Triffin problem D. Marshall-Lerner condition 4.The short-term factors affecting the exchange rate are (D) inflation, (B) economic growth, (C).The spot exchange rate of RMB against US dollar is (A) A.B. Direct marking B. indirect marking C. swap marking D. cycle marking 6.The possibility of losses to holders due to fluctuations in the trading price of financial instruments belongs to (B) A.A. money market B. credit risk C. default risk D. liquidity risk 7.B. Treasury market B. Stock market C. Bond market D. Fund market 8.Option business B. swap business C. repurchase agreement D. interbank lending 9. Preference over common shareholders is reflected in (C) A.Priority voting right B. priority voting right C. priority claim right of residual assets D. priority option of rights offering 10.The theoretical basis for the emergence of financial swap contracts is (C) A. Interest rate parity theory B.C. Efficient market theory D. Comparative Advantage theory 11.What is true about the financial forward contract? (D) a. Highly liquid B. highly standardized C.D. The delivery price is determined by negotiation between the two parties.A. bank of China B. People’s Bank of China C. China Development Bank D. Agricultural Bank of ChinaInvestment banks use their own capital to participate in securities trading to earn bid-ask spreads.Securities underwriting B. Securities trading C. securities brokerage D. Asset management 14.The principle of insurance for determining the highest standard of indemnity for the insured is (D) a. Principle of utmost good faith B.The principle of proximate Cause c. the principle of compensation for Losses D. the principle of insurable interest 15.B. Keynes’s money demand theory C. Cambridge Equation D. Friedman’s money demand theory 16.Marx believed that the amount of money necessary to implement the means of circulation in A given period of time is the same as the velocity of money circulation (B) A.17. The monetary base is represented by the central bank (D).Assets B. Income C. Equity D. Liabilities 18.B. preferential interest rate C. credit quota D. statutory reserve ratioThe monetary policy operations that cause an increase in the money supply are (D) a. the issuance of central bank bills B.[C] increase the rediscount rate [D] increase the required reserve ratioThe theory of incorporating stock price changes into the transmission mechanism of monetary policy is (C).The transmission mechanism theory of credit channel B. The transmission mechanism theory of money C. the transmission mechanism theory of financial asset price D.Interest rate transmission mechanism theory two multiple choice questions: this big question has 5 questions, each question 2 points, a total of 10 points.21. The advantages of indirect financing over direct financing lie in (ACD) (A) flexibility and convenience (B).Low cost of financing c. diversified investment and high security D. economies of scale e. Free maturity funds for fundraisers 22.A. Bills B. Real estate C.23. Rules for trading in financial futures markets include (ABDE) A.B. Implement the margin system C. Implement the liability settlement system D.24. The central bank acts as A “bank of banks”.Acting as an agent of the Treasury B. acting as lender of last resort C. formulating and implementing monetary policy D. monopolizing the right to issue currency E.25. Factors that are positively correlated with money demand are (AC) A.A. rate of return b. rate of circulation C. price level D. degree of credit development E. Rate of return on non-monetary financial assetsJudge right or wrong, wrong please explain the reason.26. Under the direct quotation method, an increase in the amount of domestic currency translated into a given unit of foreign currency indicates an increase in the exchange rate of the domestic currency.A: Wrong.(1分) Reason: Under indirect quotation method, the amount of foreign currency converted into a certain unit of domestic currency increases, indicating that the exchange rate of domestic currency rises.(Or: under the direct quotation method, the amount of local currency converted into a given unit of foreign currency increases, indicating a decline in the exchange rate of the local currency.)Credit sales, installment payments and consumer credit are the typical forms of consumer credit.Answer: Correct.(3 points) 28. In the US, the Glass-Steagall Act allows investment banks to take deposits.A: Wrong.(1分) Reason: According to the Glass-Steagall Act of the United States, investment banks cannot engage in commercial banking business such as deposit-taking.Rural commercial banks in China were restructured and established on the basis of rural credit cooperatives.Answer: Correct.At present, the ultimate goal of China’s monetary policy is to maintain the stability of currency value.A: Wrong.At present, the ultimate goal of China’s monetary policy is to maintain the stability of currency value and thus promote economic growth.4, Calculation: this big question altogether 2 small questions, each small question 8 points, a total of 16 points.The result of the calculation is reserved for two decimal places.31. Suppose a bond has a face value of $1000, with a five-year repayment period and annual interest of $50.Please calculate :(1) the nominal yield of the bond.Answer: Nominal yield = annual coupon ÷ coupon amount ×100%= 50÷1000×100%=5% (2 cent) (2 cent) If the market price of the bond on a certain day is 1020 yuan, then what is the current yield of the bond?Answer: Current yield = annual coupon ÷ current market price ×100%= 50÷1020×100%=4.9%Answer: Holding yield =÷ buying price =÷1050=7.05% (3 cents) 32.An enterprise intends to apply to the bank for a two-year loan of 10 million yuan.Bank A offers A two-year loan with an annual interest rate of 5.8%, based on simple interest.Bank B is offering a two-year loan with an annual interest rate of 5.66%, compounded annually.Under the same conditions of other loans, which bank should the enterprise borrow from?Answer: (1) Simple interest: C=P• R •n=1000×5.8%×2=116 (in ten thousand yuan) n2(2) Compound interest:C=P (1+ R) -p =1000× (1+5.66%) -1000= 1,1640 (ten thousand yuan) (3 marks) (3 marks) Since 1,1640 million yuan > 1,160,000 yuan, the enterprise should borrow money from bank A.5. Short answer: There are 3 short questions in this big question, each question is 8 points, a total of 24 points.33. Briefly describe the impact of developments in electronic technology on the form of money.Answer :(1) the rapid development and popularization of electronic technology have affected the form of money. “electronic money” and “digital money” have emerged and received more and more extensive attention and use.(2) Electronic money is a kind of money which relies on the electronic financial network, takes the electronic computer technology and communication technology as the means, is stored in the computer system in the form of electronic data, and realizes the payment and storage function through the transmission of electronic information in the computer network system.(3) Digital currency is a virtual currency based on node network and digital encryption algorithm.34. Briefly describe the functions of money market.Answer :(1) the money market is the market where the government and enterprises can adjust the surplus and shortage of funds to meet the short-term financing needs.(2) Money market is the market where commercial banks and other financial institutions conduct liquidity management.(3) Money market is the place where the central bank of a country carries out macro-financial regulation and control.(4) Money market is the place where the market benchmark interest rate is generated.(2 marks) 35. Briefly describe the “three principles” of commercial bank operation and their relationship.Answer: (1) The “three principles” of commercial bank operation include: safety principle, liquidity principle and profitability principle.(2) The principles of the three sexes contradict each other and coordinate with each other.On the premise of ensuring security and liquidity, commercial banks should pursue maximum profit and realize the balance of the “three principles”.(4分) What is the meaning of this passage?36. Based on China’s reality, this paper tries to describe the inflation demand pull up theory and the impact of inflation on income distribution.Answer :(1) the demand pull up theory holds that the expansionary fiscal and monetary policies adopted by governments stimulate the total social demand. When the total social demand is greater than the total social supply, the inflationary gap will be formed, which will affect the price rise and lead to inflation.Inflation can cause redistribution of income.(2分) ① Because wage increases tend to lag behind price increases, members of the broad working class are often the victims of inflation.② Retirees and the elderly will be hardest hit by inflation.Generally speaking, inflation is good for debtors and bad for creditors.(4) The lag of wage adjustment increases the profits of enterprises. Theoretically, enterprises are the beneficiaries of inflation, but it should be analyzed in specific cases.From the above four aspects of the analysis, as appropriate to 1~5 points.(3) Since the reform and opening up, there have been several times of inflation in China’s economic operation, such as 1988 and 1994.The increase of social aggregate demand caused by expansionary fiscal policy and monetary policy is one of the main causes of inflation.Since inflation hurts most members of society and may intensify conflicts among different classes, the government should take effective measures to control inflation in a timely manner.(3 marks) wechat official account: Tianfu Self-Study Exam Self-Study Room

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