英文國際金融練習卷Chapter-2

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InternationalFinance

AssignmentProblems(2)Name:StudentNo.:

I.Choosethecorrectanswerforthefollowingquestions(onlyONEcorrectanswer)(5creditsforeachquestion,totalcredits4x15=60)

1.Accordingtotheprincipleofthebalancedbalanceofpayments,ifacountryreducesitsforeignexchangereservesby$20millionandthestatisticaldiscrepancyisinthecreditentryof$5millioninagivenperiodoftime,thecountryruns__________ofitsbalanceofpaymentsduringthatperiodoftime.

A.$15milliondeficits

B.$25milliondeficits

C.$20milliondeficits

D.$5milliondeficits

2.Ifacountry’sdomesticsavingisgreaterthandomesticinvestment,thecountryprobablyhas__________.

A.acurrentaccountsurplus

B.anetcapitaloutflow

C.acurrentaccountdeficit

D.BothAandBarepossible.

3.Adebitentryinthebalance-of-paymentsaccountrepresentsatransactionthat__________.

A.adomesticresidentreceivesapaymentfromabroad

B.adomesticresidentmakesapaymenttoaforeignresident

C.willimprovethecurrentaccountstatus

D.willhavenoaffectsonthenation’sforeignexchangereserves

4.Intermsofbalance-of-paymentsaccount,whichofthefollowingwouldberecordedasadebitentryintheU.S.BOP?

A.exportsofmerchandise

B.exportsofservices

C.purchaseoftheU.S.Treasurybondsbynon-residents

D.anincreaseofthedepositinaU.S.resident'saccountataforeignbank

5.Abalance-of-paymentsdeficitisdefinedasasituationinwhich__________.

A.thevalueofpaymentsmadetotheforeignersexceedsthevalueofreceiptsreceivedfromtheforeignersinagivenperiodoftime

B.thegovernmentmustborrowinordertomeetitsbudgetobligations

C. thevalueofmanufacturedgoodexportsislessthanthevalueofimportedgoods

D.anationearnsmuchinextraassetsorreducedliabilitiesinitsdealingswiththerestoftheworld

6.WhichofthefollowingwouldNOTbeconsideredasatypicalBOPtransaction?

A.ToyotaUSAisaUSdistributorofautomobilesmanufacturedinJapanbyitsparentcompany.

B.AU.S.subsidiaryofEuropeanfinancialgiant,CreditSuisse,paysdividendstoitsparentinZurich.

C.AUStouristpurchasesgiftsatamuseuminLondon.

D.AllareexampleofBOPtransactions.

7.Thebalanceofpaymentsisastatisticalrecordwhichmeasuresthetotalvalueof__________.

A.acountry’sforeignexchangereservesinacertainperiodoftime

B.acountry’sforeigntradesbetweentheresidentsofacountryanditsnon-residentsforagivenperiodoftime

C.alleconomicandfinancialtransactionsbetweentheresidentsofacountryanditsnon-residentsforagivenperiodoftime

D.acountry’scapitalinflowsandoutflowsataparticulardateinagivenyear

8.ABritishpensionfundsellssomeofitsholdingsofthestocksofU.S.companiesinordertobuyU.S.corporatebonds.Thistransactionwillaffect__________.

A.theU.S.internationalinvestmentposition

B.theBritishinternationalinvestmentposition

C.bothcountries’internationalinvestmentposition

D.Noneoftheabove.Thisisbecausebothcountries’internationalinvestmentpositionunchanged,onlythecompositionofforeigninvestmentsinbothU.S.andU.K.changes.

9.WhichofthefollowingtransactionsisincludedinChina’sbalance-of-paymentsaccount?

A.AU.S.embassyinBeijingpayssalariestoitsAmericanstaffs.

B.TheWorldBankfurnishestheChinesegovernmentwithaloan.

C.AU.S.studentpaystuitionfeesforhis4year-studyinBeijingUniversity.

D.TheChineseembassyinWashingtonbuystelecommunicationequipmentsfromaChinesecompanyinShanghai.

10.IftheU.S.runscurrentaccountdeficits,wecanexpectthat__________.

A.itmayactasanetdebtorintherestoftheworld

B.itsdomesticsavingmaylessthanitsdomesticinvestment

C.itsdomesticproductionislessthanitsdomesticconsumption

D.alloftheabove

11.Thetradedeficitmeansthat__________.

A.residentsareimportingmoregoodsthantheyareexporting

ADutchcompanybasedinRotterdamuses€1millionthatitwasholdinginashort-termdepositwithitsRotterdambanktopurchase10-yearbondsissuedbyGermangovernment.

IV.Trueorfalse:(7credits)

Acreditentryinthebalanceofpaymentsrepresentsademandforlocalcurrencywhereasadebitentryrepresentsasupplyoflocalcurrency.YouMUSTexplainyouranswer.

AnswerstoAssignmentProblems(2)

PartI

1.C2.D3.B4.D5.A6.D7.C8.D9.B10.D

11.A12.C13.B14.D15.B

PartII

1.-4262.-3913.3804.3705.deficits.Becausetheofficialreservesreducedby$10million.

6.806-777-128=-99

PartIII

ExportShorttermclaims

(-)(+)(-)(+)

€100,000€100,000

b.ImportShorttermliabilities

(-)(+)(-)(+)

€150,000€150,000

c.PortfolioinvestmentShorttermliabilities

(-)(+)(-)(+)

€1,000,000€1,000,000

PartIV

True.BecausethecreditentryinBOPmea