2021内蒙古金融英语考试真题卷（6）.docx

2021内蒙古金融英语考试真题卷（6）本卷共分为2大题25小题，作答时间为180分钟，总分100分，60分及格。一、单项选择题（共14题，每题2分。每题的备选项中，只有一个最符合题意） 1. 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 investors yield comes from the increase in the value of the security between the time it was pm, chased 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.nvestors in deep and liquid markets face immense risk that they will not be able to sell their securities when they want to. AA. RightBB. WrongCC. Doesnt say 2. Liquidity risk arises from the inability of a bank to accommodate unexpected decreases in U (21) /U or to fund increases in U (22) /U. When a bank has U (23) /U liquidity, it cannot obtain sufficient funds, either by increasing liabilities or by U (24) /U assets promptly, at a reasonable cost, thereby affecting profitability. In extreme cases, insufficient liquidity cam lead to the U (25) /U of a bank. AefficiencyBabilityCsolvencyDinsolvency 3.James Sigmund, CFA, is the Head of International Equity for Pell Global Advisors (PGA). Sigmund is considering investing in the country of Zuflak as part of an emerging market portfolio. Sigmund is aware of the risks in investing in emerging markets and is preparing a valuation report regarding this investment. He estimates that Zuflak government debt would be rated BB, and has gathered the following market information for use in analyzing Zuflak. Local Government Bond Yield = 11.50% U.S. 10 year Treasury Bond Yield = 4.50% U.S. BB rated Corporate Bond Yield = 7.75% Local Inflation Rate = 6.50% U.S. Inflation Rate = 3.00% To assist in his analysis of Zuflak, Sigmund has asked Stefano Testorf, CFA, to estimate a value for Kiani Corporation (Kiani), Oleg Industries (Oleg), and Malik Incorporated (Malik) - the three primary companies domiciled in Zuflak that Sigmund has determined to have adequate liquidity for inclusion in PGAs client portfolios. Testorf gives Sigmund a rough draft of his report and tells Sigmund that in order to account for country specific emerging market risks; he used a probability-weighted scenario analysis to adjust cash flows. Sigmund asks him, “Why didnt you simply adjust the discount rate ” Testorf replies with three reasons: Reason 1: The country risk attributable to Zuflak can be diversified away according to modern finance theory, and should not be included in the cost of capital. Reason 2: Companies in emerging markets tend to exhibit wild price swings both up and down, therefore adjusting cash flows is the best way to account for these symmetrical country risks. Reason 3: Although Kiani, Oleg, and Malik are all domiciled in Zuflak, each of these companies will tend to respond differently to country risks. This makes it virtually impossible to adjust the discount rate for country specific risk and come up with an accurate valuation estimate. After careful analysis by Sigmund and his team, Sigmund decides that he wants to have exposure to Zuflak in his international portfolios. He is still unsure however, what the best way would be to establish the exposure. Sigmund discusses his concerns with Steve Solak, another portfolio manager with PGA. Solak suggests that Sigmund consider using a closed-end country fund to invest in Zuflak. Solak hands Sigmund a copy of a note that he had provided to a client listing facts about country-specific closed end funds. The note contained the following statements: Closed-end country funds provide an excellent means to access local foreign markets. Even nations that have restrictions on foreign investment are sometimes accessible using closed-end country funds. Closed-end country funds issue a fixed number of shares and are a great way to diversify a U.S.-dollar stock portfolio because of their low correlation with the U.S. stock market. Sigmund thanks Solak for the information and heads back to his office. As he is leaving, Solak asks him if he would have time later that afternoon to discuss the use of American Depository Receipts (ADRs).What is the best estimate of the country risk premium for Zuflak ()A0.25%.B1.50%.C2.75%.D6.00%. 4.James Sigmund, CFA, is the Head of International Equity for Pell Global Advisors (PGA). Sigmund is considering investing in the country of Zuflak as part of an emerging market portfolio. Sigmund is aware of the risks in investing in emerging markets and is preparing a valuation report regarding this investment. He estimates that Zuflak government debt would be rated BB, and has gathered the following market information for use in analyzing Zuflak. Local Government Bond Yield = 11.50% U.S. 10 year Treasury Bond Yield = 4.50% U.S. BB rated Corporate Bond Yield = 7.75% Local Inflation Rate = 6.50% U.S. Inflation Rate = 3.00% To assist in his analysis of Zuflak, Sigmund has asked Stefano Testorf, CFA, to estimate a value for Kiani Corporation (Kiani), Oleg Industries (Oleg), and Malik Incorporated (Malik) - the three primary companies domiciled in Zuflak that Sigmund has determined to have adequate liquidity for inclusion in PGAs client portfolios. Testorf gives Sigmund a rough draft of his report and tells Sigmund that in order to account for country specific emerging market risks; he used a probability-weighted scenario analysis to adjust cash flows. Sigmund asks him, “Why didnt you simply adjust the discount rate ” Testorf replies with three reasons: Reason 1: The country risk attributable to Zuflak can be diversified away according to modern finance theory, and should not be included in the cost of capital. Reason 2: Companies in emerging markets tend to exhibit wild price swings both up and down, therefore adjusting cash flows is the best way to account for these symmetrical country risks. Reason 3: Although Kiani, Oleg, and Malik are all domiciled in Zuflak, each of these companies will tend to respond differently to country risks. This makes it virtually impossible to adjust the discount rate for country specific risk and come up with an accurate valuation estimate. After careful analysis by Sigmund and his team, Sigmund decides that he wants to have exposure to Zuflak in his international portfolios. He is still unsure however, what the best way would be to establish the exposure. Sigmund discusses his concerns with Steve Solak, another portfolio manager with PGA. Solak suggests that Sigmund consider using a closed-end country fund to invest in Zuflak. Solak hands Sigmund a copy of a note that he had provided to a client listing facts about country-specific closed end funds. The note contained the following statements: Closed-end country funds provide an excellent means to access local foreign markets. Even nations that have restrictions on foreign investment are sometimes accessible using closed-end country funds. Closed-end country funds issue a fixed number of shares and are a great way to diversify a U.S.-dollar stock portfolio because of their low correlation with the U.S. stock market. Sigmund thanks Solak for the information and heads back to his office. As he is leaving, Solak asks him if he would have time later that afternoon to discuss the use of American Depository Receipts (ADRs).To determine a valuation estimate for Oleg, Testorf assumes that local investors require a 5 percent real rate of return on companies with similar risk to Oleg. What is Olegs price-to-earnings (P/E) ratio, if the company has an inflation flow-through rate of 65 percent ()A13.75.B5.33.C3.00.D21.25 5.James Sigmund, CFA, is the Head of International Equity for Pell Global Advisors (PGA). Sigmund is considering investing in the country of Zuflak as part of an emerging market portfolio. Sigmund is aware of the risks in investing in emerging markets and is preparing a valuation report regarding this investment. He estimates that Zuflak government debt would be rated BB, and has gathered the following market information for use in analyzing Zuflak. Local Government Bond Yield = 11.50% U.S. 10 year Treasury Bond Yield = 4.50% U.S. BB rated Corporate Bond Yield = 7.75% Local Inflation Rate = 6.50% U.S. Inflation Rate = 3.00% To assist in his analysis of Zuflak, Sigmund has asked Stefano Testorf, CFA, to estimate a value for Kiani Corporation (Kiani), Oleg Industries (Oleg), and Malik Incorporated (Malik) - the three primary companies domiciled in Zuflak that Sigmund has determined to have adequate liquidity for inclusion in PGAs client portfolios. Testorf gives Sigmund a rough draft of his report and tells Sigmund that in order to account for country specific emerging market risks; he used a probability-weighted scenario analysis to adjust cash flows. Sigmund asks him, “Why didnt you simply adjust the discount rate ” Testorf replies with three reasons: Reason 1: The country risk attributable to Zuflak can be diversified away according to modern finance theory, and should not be included in the cost of capital. Reason 2: Companies in emerging markets tend to exhibit wild price swings both up and down, therefore adjusting cash flows is the best way to account for these symmetrical country risks. Reason 3: Although Kiani, Oleg, and Malik are all domiciled in Zuflak, each of these companies will tend to respond differently to country risks. This makes it virtually impossible to adjust the discount rate for country specific risk and come up with an accurate valuation estimate. After careful analysis by Sigmund and his team, Sigmund decides that he wants to have exposure to Zuflak in his international portfolios. He is still unsure however, what the best way would be to establish the exposure. Sigmund discusses his concerns with Steve Solak, another portfolio manager with PGA. Solak suggests that Sigmund consider using a closed-end country fund to invest in Zuflak. Solak hands Sigmund a copy of a note that he had provided to a client listing facts about country-specific closed end funds. The note contained the following statements: Closed-end country funds provide an excellent means to access local foreign markets. Even nations that have restrictions on foreign investment are sometimes accessible using closed-end country funds. Closed-end country funds issue a fixed number of shares and are a great way to diversify a U.S.-dollar stock portfolio because of their low correlation with the U.S. stock market. Sigmund thanks Solak for the information and heads back to his office. As he is leaving, Solak asks him if he would have time later that afternoon to discuss the use of American Depository Receipts (ADRs).In regard to Testorfs reasons for incorporating emerging market risk into the valuation of Zuflak by adjusting cash flows rather than adjusting the discount rate, which of the following is TRUE ()A Reasons 1 and 3 support Testorfs cash flow adjustment, but reason 2 does not.BAll three of the reasons given support Testorfs cash flow adjustment.CReasons 2 and 3 support Testorfs cash flow adjustment, but reason 1 does not.DReason 1 supports Testorfs cash flow adjustment, but reasons 2 and 3 do not. 6.James Sigmund, CFA, is the Head of International Equity for Pell Global Advisors (PGA). Sigmund is considering investing in the country of Zuflak as part of an emerging market portfolio. Sigmund is aware of the risks in investing in emerging markets and is preparing a valuation report regarding this investment. He estimates that Zuflak government debt would be rated BB, and has gathered the following market information for use in analyzing Zuflak. Local Government Bond Yield = 11.50% U.S. 10 year Treasury Bond Yield = 4.50% U.S. BB rated Corporate Bond Yield = 7.75% Local Inflation Rate = 6.50% U.S. Inflation Rate = 3.00% To assist in his analysis of Zuflak, Sigmund has asked Stefano Testorf, CFA, to estimate a value for Kiani Corporation (Kiani), Oleg Industries (Oleg), and Malik Incorporated (Malik) - the three primary companies domiciled in Zuflak that Sigmund has determined to have adequate liquidity for inclusion in PGAs client portfolios. Testorf gives Sigmund a rough draft of his report and tells Sigmund that in order to account for country specific emerging market risks; he used a probability-weighted scenario analysis to adjust cash flows. Sigmund asks him, “Why didnt you simply adjust the discount rate ” Testorf replies with three reasons: Reason 1: The country risk attributable to Zuflak can be diversified away according to modern finance theory, and should not be included in the cost of capital. Reason 2: Companies in emerging markets tend to exhibit wild price swings both up and down, therefore adjusting cash flows is the best way to account for these symmetrical country risks. Reason 3: Although Kiani, Oleg, and Malik are all domiciled in Zuflak, each of these companies will tend to respond differently to country risks. This makes it virtually impossible to adjust the discount rate for country specific risk and come up with an accurate valuation estimate. After careful analysis by Sigmund and his team, Sigmund decides that he wants to have exposure to Zuflak in his international portfolios. He is still unsure however, what the best way would be to establish the exposure. Sigmund discusses his concerns with Steve Solak, another portfolio manager with PGA. Solak suggests that Sigmund consider using a closed-end country fund to invest in Zuflak. Solak hands Sigmund a copy of a note that he had provided to a client listing facts about country-specific closed end funds. The note contained the following statements: Closed-end country funds provide an excellent means to access local foreign markets. Even nations that have restrictions on foreign investment are sometimes accessible using closed-end country funds. Cl