金融英语考试模拟试题及答案(06)
SECTION TWO(Compulsory): Reading Comprehension (10 points)
Monica Lewis, CFA, has been hired to review data on a series of forward contracts for a major client. The client has asked for an analysis of a contract with each of the following characteristics:
A forward contract on a U.S. Treasury bond
A forward rate agreement (FRA)
A forward contract on a currency
Information related to a forward contract on a U.S. Treasury bond: The Treasury bond carries a 6 percent coupon and has a current spot price of $1,071.77 (including accrued interest). A coupon has just been paid and the next coupon is expected in 183 days. The annual risk-free rate is 5 percent. The forward contract will mature in 195 days.
Information related to a forward rate agreement: The relevant contract is a 3 x 9 FRA. The current annualized 90-day money market rate is 3.5 percent and the 270-day rate is 4.5 percent. Based on the best available forecast, the 180-day rate at the expiration of the contract is expected to be 4.2 percent.
Information related to a forward contract on a currency: The risk-free rate in the U.S. is 5 percent and 4 percent in Switzerland. The current spot exchange rate is $0.8611 per Swiss France (SFr). The forward contract will mature in 200 days.
1) Based on the information given, what initial price should Lewis recommend for a forward contract on the Treasury bond? ( )
A. $1,035.12.
B. $1,073.54.
C. $1,053.66.
D. $1,070.02.
2) Suppose that the price of the forward contract for the Treasury bond was negotiated off-market and the initial value of the contract was positive as a result. Which party makes a payment and when is the payment made? ()
A. The long pays the short at the maturity of the contract.
B. The short pays the long at the initiation of the contract.
C. The short pays the long at the maturity of the contract.
D. The long pays the short at the initiation of the contract.
3) Suppose that instead of a forward contract on the Treasury bond, a similar futures contract was being considered. Which one of the following alternatives correctly gives the preference that an investor would have between a forward and a futures contract on the Treasury bond? ()
A. The futures contract will be preferred to the forward contract.
B. An investor would be indifferent between the two types of contracts.
C. It is impossible to say for certain because it depends on the correlation between the underlying asset and interest rates.
D. The forward contract will be preferred to the futures contract.
4) Based on the information given, what initial price should Lewis recommend for the 3 x 9 FRA? ()
A. 4.96%.
B. 4.66%.
C. 5.96%.
D. 5.66%.
5) Based on the information given and assuming a notional principal of $10 million, what value should Lewis place on the 3 x 9 FRA at time of settlement? ()
A. $38,000 paid from short to long.
B. $19,000 paid from long to short.
C. $37,218 paid from long to short.
D. $19,000 paid from short to long.
SECTION THREE(Compulsory)：Explanations of terms(25 points)
1. Security market line
2. Negotiable certificates of deposit
3. Risk premium
4. Financial leasing
5. Asset Price Volatility
SECTION FOUR：Answer Questiones(32 points)
1.What is the segmented markets theory?
2. What Are the Recent Trends in Reserves？
3. Factors Affecting Choice of Investment Securities.
4.What is Behavioral Finance Theory?
SECTION FIVE：Caculation(13 points)
In 2008, Chinese consumption ( C) is 100 billion yuan ,and its investment(I) is 80 billion yuan, and its government expenditures ( G) is 50billion yuan, and its net exports (X - M) is 60billion.Please calculate the the value of total domestic output (Y) according to the absorption approach.
SECTION SIX：CLOSE(10 points)
Do you think what the effects of monetary and fiscal policies on a nation’s external balance are? And then fill in the blank.
(a) monetary policy
(a) fiscal policy
Monica Lewis, CFA, has been hired to review data on a series of forward contracts for a major client. The client has asked for an analysis of a contract with each of the following characteristics:
A forward contract on a U.S. Treasury bond
A forward rate agreement (FRA)
A forward contract on a currency
Information related to a forward contract on a U.S. Treasury bond: The Treasury bond carries a 6 percent coupon and has a current spot price of $1,071.77 (including accrued interest). A coupon has just been paid and the next coupon is expected in 183 days. The annual risk-free rate is 5 percent. The forward contract will mature in 195 days.
Information related to a forward rate agreement: The relevant contract is a 3 x 9 FRA. The current annualized 90-day money market rate is 3.5 percent and the 270-day rate is 4.5 percent. Based on the best available forecast, the 180-day rate at the expiration of the contract is expected to be 4.2 percent.
Information related to a forward contract on a currency: The risk-free rate in the U.S. is 5 percent and 4 percent in Switzerland. The current spot exchange rate is $0.8611 per Swiss France (SFr). The forward contract will mature in 200 days.
1) Based on the information given, what initial price should Lewis recommend for a forward contract on the Treasury bond? ( )
A. $1,035.12.
B. $1,073.54.
C. $1,053.66.
D. $1,070.02.
2) Suppose that the price of the forward contract for the Treasury bond was negotiated off-market and the initial value of the contract was positive as a result. Which party makes a payment and when is the payment made? ()
A. The long pays the short at the maturity of the contract.
B. The short pays the long at the initiation of the contract.
C. The short pays the long at the maturity of the contract.
D. The long pays the short at the initiation of the contract.
3) Suppose that instead of a forward contract on the Treasury bond, a similar futures contract was being considered. Which one of the following alternatives correctly gives the preference that an investor would have between a forward and a futures contract on the Treasury bond? ()
A. The futures contract will be preferred to the forward contract.
B. An investor would be indifferent between the two types of contracts.
C. It is impossible to say for certain because it depends on the correlation between the underlying asset and interest rates.
D. The forward contract will be preferred to the futures contract.
4) Based on the information given, what initial price should Lewis recommend for the 3 x 9 FRA? ()
A. 4.96%.
B. 4.66%.
C. 5.96%.
D. 5.66%.
5) Based on the information given and assuming a notional principal of $10 million, what value should Lewis place on the 3 x 9 FRA at time of settlement? ()
A. $38,000 paid from short to long.
B. $19,000 paid from long to short.
C. $37,218 paid from long to short.
D. $19,000 paid from short to long.
SECTION THREE(Compulsory)：Explanations of terms(25 points)
1. Security market line
2. Negotiable certificates of deposit
3. Risk premium
4. Financial leasing
5. Asset Price Volatility
SECTION FOUR：Answer Questiones(32 points)
1.What is the segmented markets theory?
2. What Are the Recent Trends in Reserves？
3. Factors Affecting Choice of Investment Securities.
4.What is Behavioral Finance Theory?
SECTION FIVE：Caculation(13 points)
In 2008, Chinese consumption ( C) is 100 billion yuan ,and its investment(I) is 80 billion yuan, and its government expenditures ( G) is 50billion yuan, and its net exports (X - M) is 60billion.Please calculate the the value of total domestic output (Y) according to the absorption approach.
SECTION SIX：CLOSE(10 points)
Do you think what the effects of monetary and fiscal policies on a nation’s external balance are? And then fill in the blank.
(a) monetary policy
(a) fiscal policy