1. Which of the following is not a function of money? ______.

A. To act as a medium of exchange

B. To act as a unit of account

C. To act as a store of value

D. To provide a double coincidence of wants

E. To act as a means of payment

2. The price in the foreign exchange market is called ______.

A. the trade surplus

B. the exchange rate

C. the money price

D. the currency rate

3. Market risk refers to the risk of______.

A. financial prices fluctuations

B. default

C. fraud

D. deferred payments

4. Which of the following is not among the generally accepted accounting principles? ______.

A. Cash basis

B. Prudence

C. Consistency

D. Going concern

E. Money measurement.

5. What is a documentary letter of credit? ______.

A. A conditional bank undertaking to pay an exporter on production of stipulated documentation

B. A method of lending against documentary security

C. An international trade settlement system biased in favour of importers

D. All of the above

6. Holding a group of assets reduces risk as long as the assets ______.

A. are perfectly correlated

B. are completely independent

C. do not have precisely the same pattern of returns

D. have a correlation coefficient greater than one

7. An amount, payable in money goods, or service, owed by a business to a creditor, is known as a/an .

A. liability

B. debt

C. equity

D. asset