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