金融英语模拟题(一)T1P2-Reading

金融英语模拟题（一）

Part two Reading

Section One (10%)
Directions: There are ten statements in this section. For each statement there are four choices marked A，B，C，
D. You should choose the best answer.

31. If the lessor makes an equity investment equal to 20% of the equipment's original cost, and borrows the
remaining 80% from a long-term creditor, and writes a noncancelable lease for the equipment, such lease is called
a ___________.
A. operating lease
B. leveraged lease
C. direct- financing lease
D. sales-type lease
32. The interest rate for borrowing funds from inter-bank market is close to, but always slightly ____________ the
rate that is available from the central bank.

A. lower than
B. higher than
C. as high as
D. not as high as

33. ___________ is a financial market in which securities that have been previously issued can be resold.

A. A primary market
B. A secondary market
C. A issuing market
D. The capital market

34. Of the challenging issues in Internet banking, which people care most,
is _________.

A. the provision of a secure platform for banking transactions
B. whether management has the creativity and vision to harness the technology
C. how to deliver high-quality products for the customers' convenience
D. whether management has the ability to satisfy customers' continually changing financial needs

35. From a Chinese Bank's point of view, the currency account which it maintains abroad is known as _______,
while a RMB account operated in China for a foreign bank is termed ________.

A. a vostro account; a nostro account
B. a mirror account; a nostro account
C. a nostro account; a vostro account
D. a vostro account; a mirror account

36. If __________, such a situation is called break- even.

A. contribution margin= fixed costs
B. contribution margin=total costs
C. profit=expense
D. sales revenue=variable cost

37. Foreign-funded enterprises may retain their export earnings if those earnings _______.

A. get after SAFE approves
B. will be remitted abroad
C. will be invested in local area
D. do not exceed the limit set by the SAFE

38. BOT is an abbreviated form of _________.

A. build-or-technology
B. build-operate-transfer
C. build-operate- technology
D. benefit-operate-transfer

39. _________ is the foundation of private accounting, which analyzes a business's costs to help managers control
expenses.

A. Budgeting
B. Management information system
C. Internet auditing
D. Cost accounting

40. Underwriting simply means that the investment banker promises to ________ the securities.

A. buy
B. sell
C. design
D. issue


Section Two (10%)
Directions: There are 10 blanks in the following passages. For each blanks there are four choices marked A, B, C,
D. You should choose the best answer.


Passage One

Another way of distinguishing markets is on the basis of the _____41_______of the securities in each market.
The __42______ is a financial market in which only short-term debt instruments are traded. The ___43_____ is

the market in which longer-term debt and equity instruments are traded. The securities in the former are usually
more widely traded than those in the latter and so tend to be ____44______. In addition, short-term securities have
_____45______fluctuations in prices than long- term securities, making them safer investments.

41.

A. volume
B. maturity
C. issuing procedure
D. kind

42.

A. money market
B. capital market
C. primary market
D. secondary market

43.

A. money market
B. capital market
C. primary market
D. secondary market

44.

A. more solvent
B. more risk
C. more liquid
D. safer

45.

A. volatile
B. violent
C. wider
D. smaller

Passage Two
In documentary credit operations, all parties concerned deal in ___46____ and not in ____47____. The banks
check exclusively on the basis of documents ___48____to them to see whether the terms of the credit have been
fulfilled. They are ____49_____to verify whether the goods supplied actually agree with those specified in the
credit, ____50____differences, say, between the goods invoiced and those actually delivered, nor answerable to
the buyers' complaints about these differences. It is up to the buyers and sellers to settle questionables of this
nature between themselves.

46.

A. goods
B. credits
C. documents
D. contracts

47.

A. goods
B. credits
C. documents
D. contracts

48.

A. delivered
B. presented
C. deliver
D. release

49.

A. responsible
B. not responsible
C. bound
D. willing

50.

A. nor liable for
B. or liable for
C. nor liable to
D. or liable to

Section Three (10%)
Directions: Read the following passages, and determine whether the sentences are
not enough information to answer


Passage One

New issues of common stock come into two varieties, primary distributions and secondary distributions.
Primaries are sales of stock that have never been issued before. There are two types of primary
distributions--initial public offering (IPOs) and additional floats of companies' stock that will dilute each

shareholder's existing holding. Of the two, the latter are more common in the new issues market for equities since
they involve offerings of shares of larger, more mature companies seeking additional equity capital. Secondary
distributions are sales of stock that previously existed in some form or other but are too large to be accommodated
on the stock exchanges. Procedures for secondaries often follow those for primaries although the offering period is
much shorter and may involve a matter of hours rather than days.
The actual marketing for these issues is done by investment bankers directly to the public. On rare occasions,
companies have attempted to sell their shares or bonds directly to the public, avoiding investment banking fees.
Unless the company is very well known, such attempts are less than successful. The behavior of investment
bankers is key to the reception of new issues and directly affects the cost of capital for a company. As a result, the
choice of an investment banker is crucial for a company, and the wrong choice could affect its costs over the near
term.

51. Initial public offerings (IPOs) are one of the type of primary distributions,while additional floats of companies'
stock belong to secondary distributions.



't say

52. Compared with additional floats of companies' stock, initial public offering
(IPOs) are more common because they involve offerings of shares larger, more mature companies seeking
additional equity capital.



't say

primary distributions and secondary distributions are issued in primary markets.



't say

54. Few companies have attempted to see their shares or bonds directly to the public.



't say


Passage Two

The simplest means of transferring funds abroad is by means of the airmail remittance order. For example, a
local customer of the bank wishes to send money to a relative in Japan. The local customer goes to the United
States bank and specifies where and to whom the money is to be delivered. He also indicates the amount he
wishes to send, for example, USD$$100. The bank prepares a letter to its correspondent bank in the town nearest to

where the relative lives. In this letter, the United States bank says,
address ) of recipient.
reimbursement, we credit your account with us.
States bank has been credited USD100 (The United states bank credits the Japanese banks due to account).

55. MT is the simplest means of transferring funds abroad.



't say

56. According to the passage, the local customer of U.S. is a remitter.



't say

Japanese bank debits the U.S. bank's due from account.



't say


Passage Three

To finance the national debt, the government issues a variety of debt securities. The most widely held liquid
security is the Treasury bill, which is commonly issued by the ministry of finance. However. some Treasury bills,
like the Treasury bill of the U. S. government, do not actually pay interest. Instead they are issued at a discount
from par (their value at maturity). The investor’s yield comes from the increase in the value of the security
between the time it was purchased and the time it matures.
Treasury bills are attractive to investors because they are backed by the government and therefore are
virtually free of default risk. Because even if the government ran out of money it could simply print more to pay
them off when they mature. The risk of unexpected changes in inflation is also low because of the short term to
maturity. The markets for Treasury bills in most developed countries are deep and liquid, A deep market is one
with many different buyers and sellers. A liquid market is one in which securities can be bought and sold quickly
and with low transaction costs. Investors in markets that are deep and liquid have little risk that they will not be
able to sell their securities when they want to.

58. Treasury bills are short-term and virtually free of default risk.



't say

59. As some treasury bills do not actually pay interest, they are not attractive to investors

't say

ors in deep and liquid markets face immense risk that they will not be able to selltheir securities when
they want to.



't say

Section Four (20%)
Directions: There are 4 passages in this sections. Each passage is followed by some questions or unfinished
statements. For each of them there are four choices marked A, B, C, D. You should choose the best answer.


Passage One

Since equal dollar amounts of debits and credits are entered in the accounts for every transaction recorded,
the sum of the debits in the ledger must be equal to the sum of all the credits. If the computation of account
balances has been accurate, it follows that the total of the accounts with debit balances must be equal to the total
of the accounts with credit balances.
Before using the account balances to prepare financial statements, it is desirable to prove that the total of
accounts with debit balances is in fact equal to the total of accounts with credit balances. This proof of the equality
of debit and credit balances is called a trial balances. A trial balance is a two-column schedule listing the names
and balances of all the accounts in the order in which they appear in the ledger. The debit balances are listed in the
left-hand column and the credit balances in the right-column. The totals of the two columns should agree.
The trial balance provides proof that the ledger is in balance. The agreement of the debit and credit totals of
the trial balance gives assurance that:
1. Equal debits and credits have been recorded for all transactions.
2. The debit or credit balance of each account has been correctly computed.
3. The addition of the account balances in the trial balance has been correctly performed.
Suppose that the debit and credit totals of the trial balance do not agree. This situation indicates that one or
more errors have been made. Typical of such errors are (1) the entering of a debit as a credit or vice verse; (2)
arithmetical mistakes in balancing accounts; (3) clerical errors in copying account balances into the trial balance;
(4) listing a debit balance in the credit column of the trial balance, or vice verse; and (5) errors in addition of the
trial balance.
The preparation of a trial balance does not prove that transactions have been correctly analyzed and recorded
in the proper accounts. If, for example, a receipt of cash were not be disclosed by the trial balance. In brief, the
trial balance proves only one respect of the ledger, and that is the equality of debit and credits.



61. A trial balance is a two- column schedule listing the names and balances of all the accounts to prove
_______________.

A. the agreement of the debit and credit totals
B. the order in which they appear in the ledger
C. the equality of account balances of financial statements
D. the order in which they appear in the recording


62. Unless __________, the totals of the debit and credit of trial balance should agree.

A. the debit or credit balance of each amount has been correctly computed
B. debits and credits have been recorded correctly for all transactions
C. unequal debits and credits have been recorded for all transactions
D. the addition of the account balance in the trial balances has been correctly performed

____________, the debit and credit totals of the trial balance do not agree.

A. mistakes appear in computing balancing accounts
B. a credit is entered as a debit
C. a credit balance is listed in the debit column
D. All of the above

64. If a payment of cash is recorded by ________, the trial balance would still balance.

A. crediting the Account Payable account
B. debiting the cash account
C. debiting the Account Receivable account
D. debiting the land account

65. A trial balance is a working paper which is intended ___________.

A. for distribution to various outsiders
B. to prepare financial statements
C. for distribution to various accountants
D. to prepare ledger accounts


Passage Two

Insurance is almost as important to business as banking. It works quite simply by spreading over a large
number of people, the costs or the losses which otherwise would fall on the few who actually suffer them.
Fire, for instance, normally damages only a few businesses each year but almost all companies buy insurance
to protect themselves against it. What happens is that most companies pay regular small amounts of money, called
the premium to insurance groups and so a large fund of money builds up. Then the few who have suffered fires
claim the cost of the damages. After investigation, the claims are paid out by the insurance companies.
For the operation to work, insurance companies have to calculate what is the chance or probability of certain
events happening, and what the cost of making accidents good will be, and how many people will pay, what rates,

to have protection. Premiums are fixed in proportion to the risk involved.
There are four principles backing up every insurance contract. The first, known as indemnity, is that the
insured should get back the same value as was lost. If you insure your watch against the risk of its being stolen,
then the insurance company will only pay out the cost of a similar, second. hired watch unless you make a special
agreement with them.
The second principle is that of agreeing that the insurer has to own, or have the insurable interest in, the
property covered, both at the time of affecting the insurance and at the time of loss. This is usual for policies
covering fire；but the insurance on ships and their cargoes can be transferred to new owners if required.
Thirdly it is necessary for the agreement to be concluded in good faith. Generally the company providing
insurance cover charges a premium based on what it is told. If a company fails to mention that a warehouse
sometimes contains explosives the underwriter may declare the contract not valid and refuse to pay a claim if the
warehouse blows up.
Finally, insurers distinguish between remote and immediate causes of an event. If there is an earthquake and
a house is damaged, catches fire and is flooded by firemen when putting out the flames, the compensation due will
depend on the exact words used in the detailed insurance contract. Usually companies do not provide cover
against earthquake damage, so the house owner may not get any compensation for the effects of the fire or water,
as these were a direct result ofthe earthquake.


66. What are the four principles backing up every insurance contract?

A. Indenmity, the insurable interest, premium and good faith.
B. Indemnity, the cost of the damage, the exact words in the contract and the insurableinterest.
ity, the insurable interest, good faith and remote and immediate causes of anevent.
D. Indemnity, the insurable interest, the cost of the damages and good faith.

67. I n Para. 2, the term

A. the cost of the damage
B. a sum of money paid regularly to an insurance company
C. proportion of the risk involved
D. a large fund of money

68. Which of the following is NOT true according to the passage?

A. Premiums are usually decided in proportion to the risk involved.
B. Insurance companies often do not provide cover against earthquake damages.
C. Insurance on ships and their cargoes can be transferred to new owners if required.
D. Those who buy insurance can claim the cost of damages if they suffer from firescaused by an earthquake.

69. Which of the following is implied, but not directly stated in the passage?

A. A regular small sum of money will cover your losses.
B. Insurance companies usually do not provide cover against earthquake losses.
C. An insurance company can build up a large sum of money from those who pay insurance charge.
D. You cannot cover the losses you suffer if the results of the investigation by insurance company turn out

not to be in your favor.

70. The purpose of this passage is ___________ .

A. to get you familiar with insurance business
B. to advise you to insure your properties
C. to tell you how to get compensation from an insurance company
D. to teach you how to sign an insurance contract


Passage Three

Once the exporter has been advised that a letter of credit has been issued in its favor, many exporters make
the mistake of starting to prepare or fulfill the requirements of the foreign customer's purchase order before
actually receiving the actual letter of credit from the opening or issuing bank. Unless the exporter has had good or
excellent prior experience with the foreign customer and its issuing bank, the exporter runs the risk of having the
goods ready for shipment, without receiving the original letter of credit. The exporter runs a risk because it may or
may not be able to comply with certain terms and conditions contained in the actual original letter of credit. It is
always conceivable new conditions might be added to the credit instrument. Or the goods might be shipped and
arrived at the overseas port of destination without any original documents because the original LC arrives late.
Thus, the foreign customer will be unable to clear goods through customs, and the goods will be stored in a
customs warehouse to accrue expensive demurrage charges.
The answer to the above mentioned problem is to have the opening bank issue the letter of credit via tested
telex or SWIFT to the advising or negotiating bank as the
for payment by the beneficiary. The exporter must make sure the negotiating or confirming bank, usually the
advising bank, is willing to accept the aforementioned as the original operative instrument. Sometimes advising,
negotiating, and even confirming banks who pay on behalf of issuing banks still want to wait for the original
written letter of credit to be received by them via mail. This might indicate a financial problem with the issuing
bank or some sort of technical problems between the banks which the exporter should investigate immediately.
The solution helps reduce or eliminate any delays in credit timely for payment after shipment of the goods.
Remember in many cases banks want the original on-board ocean bill of lading presented to them with the
original letter of credit.


71. The exporter should start to prepare or fulfill the requirements of the foreign customer's purchase order
_______________.

A. before the exporter has been advised that a letter of credit has been issued in its favor
B. after the exporter has been advised that a letter of credit has been issued in its favor
C. before the exporter actually receives the letter of credit from the opening or issuing bank
D. after the exporter actually receives the letter of credit from the opening or issuing bank

72. If the exporter starts to prepare or fulfill the requirements of the foreign customer's purchase order when he
has been advised that a letter of credit has been issued, he may run the risk of ________.

A. having the goods ready to board a steamship which may not comply with certain terms and conditions

stipulated in the letter of credit
B. having the goods shipped to the destination and cleared through customs
C. having the goods stored in the custom's warehouse without any charges
D. None of the above

73. According to the passage, the importer can clear goods through customs on presentation of ____________.

A. the original letter of credit
B. the original documents
C. the credit instrument
D. expensive demurrage charges

74. The bank that issues a letter of credit is called ____________.

A. an issuing bank
B. a confirming bank
C. a negotiating bank
D. an advising bank

75. Which of the following is NOT true?

A. The negotiating bank always agrees to accept the tested telex letter of credit as the original operative
instrument.
B. The advising bank sometimes agrees to pay on behalf of the issuing bank.
C. The confirming bank sometimes still wants to wait for the original letter of credit.
exporter sometimes pays no attention to the financial problem with the issuing bank.


Passage Four

Cost- Volume-Profit (C-V-P) analysis is the technique for determining how changes in cost and volume affect
the profitability of an organization. Here we will discuss how the analysis of cost behavior patterns allows
management to understand the effects that changes in cost, volume, and revenue will have on profit. The
techniques for studying these relationships are collectively referred to as cost-volume-profit (C-V-P) analysis.
They can be used in making decisions about selling prices, production volume, levels of discretionary fixed costs,
and so on.
There are three common and related ways to perform C-V-P analysis: (1) The contribution margin approach;
(2) The equation approach; and (3) the graphical approach. Although all the three common methods of C-V-P
analysis are variations of the same calculations, each approach has its advantages. The graphical approach allows
the simultaneous analysis of several different activity levels.
Among others things, C-V-P analysis is used to compute break-even points and target net income levels. The
equation approach is especially useful in assessing how profit change when costs or revenues change.
Three limiting assumptions are (1) that the sales mix is constant, (2) that cost and revenue behavior patterns
are linear and remain constant over the relevant range, and (3)that all costs can be categorized as either fixed or
variable. When sales volumes are relatively stable management should always emphasize the products with the
highest contribution-margin ratios.

76. According to the passage, which of the following statements is not mentioned?

A. There are three common and related ways to perform C-V-P analysis.
B. There are three limiting assumption in C-V-P analysis.
C. There are three advantages of C-V-P analysis.
D. There are three main factors in C-V-P analysis.


77. C-V-P analysis can be used for determining the following item except __________.

A. the discretionary fixed costs
B. the production volume
C. the capital amount
D. the selling price


78. ______ is (are) especially useful in simultaneous analysis of several different activity levels.

A. The graphical approach
B. The contribution margin approach
C. The equation approach
D. All of above


79. Which of the following statements is false?

A. C-V-P analysis can be used to computer break-even points and target net income levels.
B. One of the three limiting assumptions is that cost and revenue behavior patterns are linear and remain
constant over the relevant range.
C. The other limiting assumptions are that the sales mix is constant and all costs can be categorized as either
fixed or variable.
D. The contribution margin approach is especially useful in assessing how profits change when costs or
revenue change.


80. Which is not the three limiting assumptions in C-V-P analysis?

A. The sales mix is constant cost.
B. Revenue behavior patterns are linear and remain constant over the relevant range.
C. All costs can be categorized as either fixed or variable.
D. The sales volumes are relatively stable.