The word "finance" signifies capital in monetary, that is, ______, normally for capital purposes, through financial markets or financial institutions.
    A. in the way of capitals
    B. in the form of funds lent or borrowed
    C. in the method of funds
    D. on the form of funds lent or borrowed

A financial market consists of foreign exchange market, money market, bond market and equity market. The last two markets usually fall into the category of ______.
    A. preferred stock market or liquidation market
    B. stock market or debt market
    C. securities market or capital market
    D. securities market or liquidation market

______ relates to the liability of the issuing bank, whereas ______ relates to the responsibility of the correspondent bank or other banks.
    A. "Revocable" or "inrevocable", "unconfirmed" or "confirmed"
    B. "Cancelled" or "cancellate", "confirmative" or "confirmed"
    C. "Revocable" or "inrevocable", "confirmative" or "confirmed"
    D. "Cancelled" or "incancelled", "unconfirmed" or "confirmative\

A documentary collection can be defined as the collection of a sum due from a buyer by a bank ______ against delivery of certain documents.
    A. acting on behalf of a buyer
    B. behaving on behalf of an exporter
    C. acting on behalf of an importer
    D. acting on behalf of a seller

A forward exchange rate can move for two reasons:  (1) because the spot rate moves, and (2) ______.
    A. because of changes in interest rate which affect the forward rates
    B. because of changes in interest rate which affect the forward differential
    C. for the changes in interest rate affect the forward rates
    D. because of changes in interest rate which affect the spot rates

Government - to - government bilateral loans are generally in the form of grants or credits with very low interest rates and long maturities. The closest meaning of bilateral is ______.
      A. bilingual         B. bilabial         C. a double side    D. biped

The international payments system of the buyer's country is not being hampered by exchange controls. The word hamper means ______.
     A. hinder           B. put off          C. postpone        D. hold up

If the components ______ delivered earlier we might have been able to start work on time.
     A. might have been                      B. were
     C. had been                           D. were to

The number of orders went up ______ we increased our prices by 15%.
     A. when            B. although        C. because         D. since

When a commercial bank which was established ______ is found to have its ratios of assets and liabilities at variance with the stipulations within a designated time limit.
     A. superior to the promulgating of this law
     B. inferior to the promulgation of this law
     C. priority to the promulgation of this law
     D. prior to the promulgation of this law

Required, honour, dispatched, resulted, received, irrevocable, release, declared, prepared, handed

   Goods should not be  (21)   direct to address of a bank or consigned to a bank without prior agreement on the part of that bank. In the event of goods being dispatched direct to the address of a bank or consigned to a bank for delivery to a drawee against payment or acceptance or upon other terms without prior agreement on the part of that bank, the bank has no obligation to take delivery of the goods, which remain at the risk and responsibility of the party dispatching the goods.
    In practice, great careis  (22)   when goods ale consigned to the bank as large losses have  (23)   from incorrect procedures being followed.
   Quite often, goods consigned to the bank will arrive by air before the supporting documents have been  (24)  . At this stage we will have little indication of the value of the collection other than the  (25)   value of the goods for customs purposes.  It is therefore important that a letter of  (26)   is only  (27)   to the drawee who is undoubted and is  (28)    to sign an  (29)   undertaking to  (30)   the documents upon presentation regardless of the terms of those documents.

21. 

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30. 

The balance of payments is a statistical record of all the economic transaction between residents of the reporting country and residents of the rest of the world during a given time period. The usual reporting period for all the statistics included in the accounts is a year. A good or bad set of figures can have an influential effect on the exchange rate and can lead policy makers to change the content of their economic policies. Deficits may lead to the government raising interest rate or reducing public expenditure to reduce expenditure on imports. Alternatively, deficits may lead to calls for protection against foreign imports or capital controls to defend the exchange rate.
   A key definition that needs to be resolved at the outset is that of a domestic and foreign resident. It is important to note that citizenship and residency are not necessarily the same thing from the viewpoint of the balance of payments statistics. The term residents comprises individuals, households, firms and the public authorities. There are some problems that arise with respect to the definition of a resident. Multinational corporations are by definition resident in more than one country. For the purposes of balance - of - payments reporting the subsidiaries of a multinational are treated as being a resident in the country in which they are located even if their shares are actually owned by domestic residents. Another problem concerns the treatment of international organizations such as the International Monetary Fund, the World Bank, United Nations and so forth. These institutions are treated as being foreign residents even though they may actually be located in the reporting country. For example although the International Monetary Fund is located in Washington, contributions by the US government to the Fund are included in the US balance -of-payments statistics because they are regarded as transactions with a foreign resident. Tourists are regarded as being foreign residents if they stay in the reporting country for less than a year.
   The criterion for a transaction to be included in the balance of payments is that it must involve a transaction between a resident of the reporting country and a resident from the rest of the world. Purchases and sales between residents from the same country are excluded.

A Red Clause Documentary Credit is a Documentary Credit with a special condition incorporated into it that authorizes the Confirming Bank or any other Nominated Bank to make advances to the Beneficiary before presentation of the documents.
   The clause is incorporated at the specific request of the Applicant, and the wording is de- pendent upon his requirements. The Red Clause Documentary Credit is so called because the clause was originally written in red ink to draw attention to the unique nature of this Documentary Credit. The clause specifies the amount of the advance authorized, which, in some in- stances, may be for the full amount of the Documentary Credit.
   The Red Clause Documentary Credit is often used as a method of providing the seller with funds prior to shipment. Therefore, it is of value to middlemen and dealers in areas of commerce that require to a form of pre - financing and when a buyer would be willing to make special concessions of this nature.
   For example, it could be used by a wool importer in England to enable a wool shipper in Australia to obtain funds to pay the actual suppliers (either by direct purchase or through the wool auctions) by obtaining a loan from the Australian bank, either on an unsecured basis or against the security of interim documents. This would enable repayment of the loan, plus interest, from the proceeds due to the Australian Beneficiary when the wool was shipped and documents were presented in accordance with the terms of the Documentary Credit. If, however, the Beneficiary failed to ship the wool so as to repay the loan by presenting documents called for by the Documentary Credit, the Australian bank would have the right to demand repayment, with interest, from the Issuing Bank and that bank would have a similar right of recourse against the Applicant.
   This kind of arrangement places the onus of final repayment on the applicant, who would be liable for repayment of the advances if the Beneficiary failed to present the documents called for under the Documentary Credit, and who would also be liable for all costs--such as interest or foreign exchange hedging-- incurred by the Issuing Bank, the Confirming Bank, if any, or any other Nominated Bank.

Because insurance contracts are complicated, they must be approved by the regulatory authorities to ensure that the insurance - buying public will not be mistreated as a result of un- fair provisions.

Increasingly globally integrated financial markets pose significant challenges to the regulation of securities and futures market.

Many people have two accounts in a bank, A savings account and a checking account. When people deposit money in a savings account, it earns interest. They can withdraw their savings at any time, unless it is a special notice account. A special notice account earns higher interest, but you must give the bank 90 days notice before withdrawing money from it.
   People use checking accounts for convenience. They deposit some money and write checks when they want to pay bills. This way they do not have to send cash through the mail. They do not have to carry a lot of cash with them, for they can write a check instead. At the end of the month, the bank returns the checks they have written and have been cashed. The bank also sends a statement of all the checks used. That way people have a record of how much money they have spent that month.

Washington March 15 - The administration of President Carl Arling today predicted another six months of slow GNP growth and rising inflation.
   Chief economic advisor to the president, Walter Abel, told a news conference that in- creased foreign competition, rising prices for raw materials, and high interest rates would hold economic growth to less than 3% for the year with inflation rising above 7%.
   Abel said, however, that administration programs to restructure the economy would begin bearing fruit toward the end of the year and that growth in the gross national product would turn sharply upwards in the last quarter.
   He also said that the administration of President Arling was determined to increase investment in high technology industries, upgrade aging plant equipment in heavy industry, and encourage workers to increase productivity.
   Abel admitted that high interest rates threatened the strategy, but warned that any action to artificially lower interest rates risked fueling even greater inflation.
   "We are still recovering from the recession caused by the previous administration and attempts to force the pace of recovery could be dangerous," he said.