2202y_En_Q23_Əyani_Yekun imtahan_ISE testinin sualları Fənn : 2202y Büdcə və xəzinə uçotu

1. The Congressional Budget and Impoundment Control Act of 1974" saw the formation of:

• Council of Economic Advisors.

• National Economic Council
√ The Congressional Budget Office (CBO)
• General Accounting Office.
• Bureau of Budget

2. An example of discretionary spending would be:

• all
• Medicare
• Unemployment compensation
• Social Security
√ the Federal highway spending.

3. An effective public budgeting system should:

• provide accurate and relevant information to decision makers.

• provide incentives for public officials to respond to public demands
• none
√ All of the above.
• recognize competing claims on resources and alternative uses.

4. Which of the following would not be a concern of a financial audit?

• Whether permit fees collected by Department are remitted in their entirety to city Treasurer.
• all
√ Whether the 14 street cleaners employed by the Department could be replaced by a motorized sweeper to save $75,000 per year
• Whether 700 gallons of gasoline purchased by Department were actually delivered
• Whether Department of Environment Services actually spent $150,000 its reports say it did

5. Choose the best way to complete the statement: "A budget is...":

• excuse for big legislative party

• forecast for spending
• forecast for revenue collection
√ a plan for how to deal with problems
• none

6. The audit process is designed to accomplish all of the following EXCEPT:

• Ensure compliance with policies and applicable laws

√ Implement controls to the correct variances
• Prevent fraud and waste
• Ensure accuracy of operation
• none

7. Place these stages in the budget cycle in the order in which they normally occur:

• legislative consideration, audit, service delivery

• none
• Agency request, executive consideration, legislative consideration
• Executive consideration, agency request
√ An agency request, executive consideration, legislative consideration, service delivery, audit

8. Markets will fail to produce an efficient outcome when all of the below occur EXCEPT when:
 • monopolies arise
• good is non-rival and non-exclusive
• externalities arise
√ the good or service is a necessity
• none

9. A pure public good is characterized by

• Non-rivalry in use and ability to exclude

• Either nonrivalry in use or failure of exclusion
• Rivalry in use and failure of exclusion.
• none
√ both the nonrivalry in use and the failure of exclusion

10. Which of the following would be described as a common pool resource?

• none
• National defensed
• can of soda
√ An aquifer
• movie theatre

11. Second hand smoke, car exhaust, and manufacturing emissions are all examples of.

• none
• toll goods
√ the externalities
• natural monopolies
• internal effects

12. What is the reproductive subfunction

• there is no right answer

• Collecting money to generate public money funds and material conditions for the functioning of the state
√ Is designed to accumulate funds for the recovery of the resources used
• Is aimed at establishing obstacles, by tax burden, to the development of any economic processes.
• Supports the development of certain economic processes. It is implemented through a system of privileges and exemptions

13. What is the stimulating subfunction

• Aimed at addressing various problems of economic policy via fiscal mechanisms

• there is no right answer
• Is aimed at establishing obstacles, by tax burden, to the development of any economic processes.
• Is designed to accumulate funds for the recovery of the resources used
√ Supports the development of certain economic processes. It is implemented through a system of privileges and exemptions

14. Which is definition of social (distributive) taxes

√ It redistributes public revenues – transfers funds in favor of more weak and unprotected categories of citizens at the expense of imposing
a tax burden on the stronger categories of the population
• Collecting money to generate public money funds and material conditions for the functioning of the state
• Aimed at addressing various problems of economic policy via fiscal mechanisms
• Main financial plan of the state, which allows the authorities to exercise their powers in different fields and areas
• there is no right answer

15. Which is the definition of regulatory taxes

It redistributes public revenues – transfers funds in favor of more weak and unprotected categories of citizens at the expense of imposing
• a tax burden on the stronger categories of the population
• there is no right answer
 • Collecting money to generate public money funds and material conditions for the functioning of the state
√ Aimed at addressing various problems of economic policy via fiscal mechanisms
Maintaining social balance by changing the proportion between the incomes of certain social groups in order to smooth out inequalities
• between them

16. Which is the definition of fiscal taxes

• Aimed at addressing various problems of economic policy via fiscal mechanisms

It redistributes public revenues – transfers funds in favor of more weak and unprotected categories of citizens at the expense of imposing
• a tax burden on the stronger categories of the population
Maintaining social balance by changing the proportion between the incomes of certain social groups in order to smooth out inequalities
• between them
• there is no right answer
√ Collecting money to generate public money funds and material conditions for the functioning of the state

17. Which is the definition of government budget

• there is no right answer

• Main financial plan of the state, which allows the authorities to exercise their powers in different fields and areas
• Form of creation and spending money funds for the provision of tasks and functions of the country
√ An annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for
the forthcoming fiscal year.
Form of creation and spending money funds for the provision of tasks and functions assigned to the sphere of competence of local
• municipalities

18. Which is the definiion of regional budget

• there is no right answer

• Main financial plan of the state, which allows the authorities to exercise their powers in different fields and areas
Form of creation and spending money funds for the provision of tasks and functions assigned to the sphere of competence of local
• municipalities
√ Form of creation and spending money funds for the provision of tasks and functions of the country
An annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for
• the forthcoming fiscal year.

19. Which is the definition of consolidated budget

An annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for
• the forthcoming fiscal year.
• there is no right answer
Form of creation and spending money funds for the provision of tasks and functions assigned to the sphere of competence of local
• municipalities
• Form of creation and spending money funds for the provision of tasks and functions of the country
√ Main financial plan of the state, which allows the authorities to exercise their powers in different fields and areas

20. Which is the definition of local budget

• Form of creation and spending money funds for the provision of tasks and functions of the country
• there is no right answer
An annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for
• the forthcoming fiscal year
√ Form of creation and spending money funds for the provision of tasks and functions assigned to the sphere of competence of local
municipalities
• Main financial plan of the state, which allows the authorities to exercise their powers in different fields and areas

21. Which is the characteristic feature of budget

• regional budget
• function of the country
• execution of budget
√ main financial plan
• local municipal governments
22. Choose the wrong answer:

• State budget indicates the sources and size of the expected revenue to the state treasury
• State budget represents a set of financial estimates of all departments, public services, government programs, etc
• The budget is also known as the Annual Financial Statement of the country
√ A state budget is not presenting the government's proposed revenues and spending for a financial year.
• State budget determines the needs to be satisfied at the expense of the state treasury

Which policy is used to define the level of risk that a company is willing to tolerate and defines the exact types of investment vehicles to
23. be used?

• investment funds policy

• comodity future policy
• bank products policy
• stock policy
√ an investment policy

… should be recognized alongside the recognition of any change in the fair value of an investment listed in either a trading or available -
24. for - sale portfolio or of a permanent decline in the value of a debt security being held to maturity.

• good rate of return

• maturity
• available - for - sale portfolio
√ a deferred tax benefit
• marketability

Category of marketable securities that includes both debt and equity securities that the company intends to sell in the short term for a
25. profit called …

• swap
• held to maturity securities
• option
√ the trading securities
• available for sale securities

Category of marketable securities that includes only debt securities for which the company has both the intent and ability to hold them
26. until their time of maturity called …

• trading securities
• swap
• available for sale securities
• option
√ a held to maturity

27. Category of marketable securities that includes both debt and equity securities called …

• swap
• option
• held to maturity securities
• trading securities
√ an available for sale securities

28. Which type of securities company will more likely invest in?

• in forwards
• in futures
• in swaps
• in options
√ in the marketable
 ... is safer for the company if its bank enters bankruptcy, since the asset was purchased in the company ’ s name, and the company
29. therefore has title to the asset

• sweep account
• concentration account
• overnight sweep
√ the one - to - one sweep
• invest funds

30. Who insures a bank customer ’ s deposits at the bank against the failure of the bank?

• Certificate of Deposit Account Registry Service

• IASB
• Central bank
√ the FDIC
• CDARS

31. … is a strategy of buying longer - term securities and selling them prior to their maturity dates

• laddering strategy
• matching strategy
• tranched cash flow strategy
√ the riding the yield curve
• earnings credit strategy

32. Redemption of public debt means:

• repayment of internal debt

• repayment of FDI
• deficit financing
• Additional borrowing
√ the repayment of debt

33. Which of the following is a Statutory Body?

• none
• board of directors
• planning commission
√ the finance commission
• state planning board

34. Who proposed the Zero-based budgeting for the first time:

• Alfred Marshall
√ the Peter Phyrr
• Adam Smith
• David Ricardo
• none

35. Salaries and pensions paid by governments are called:

• forecast expenditure
• development expenditure
• capital expenditure
√ the revenue expenditure
• plan expenditure

36. The Classical economists asserted that public expenditure is:

• stagnant
 • productive
√ an unproductive
• all
• none

37. Which one of the following is not a public utility?

• none
• water supply
√ the tourism
• electricity
• gas

38. A budget where there is excess of expenditure over revenue is called:

√ the deficit
• balanced
• surplus
• none
• ideal

39. Public goods are

• marketable
• excludable
• none
• all
√ the non- excludable

40. Education is an example of:

• club good
• none
• public good
• social good
√ the merit good

41. In the following which is the characterstic of a tax

• forced
• optional
• none
• national
√ the compulsory

42. Budget levels:

• global,consolidated,regional
• all
• municipial,global,local
• global,regional,local
√ the federal,regional,local

43. 2 main basic elements of any budget:

• subsidies and grant

• revenue and grants
• grants and expenditure
√ the revenue and expenditure
• subsidies and expenditure
44. Stages of Budget Preparation

• executive,approval,final account,oversight
• executive,approval,preparation,final account,oversight
• final account,approval,oversight,preparation,executive
√ the Preparation, Approval, Executive , Oversight , Final Account or Statement.
• Approval, Executive , Oversight , Final Account or Statement.

45. The largest single source of tax revenue to local governments is:

• retail sales tax

• Individual income tax
• payroll tax
√ the real property tax
• none

46. Which of the following best describes the Congressional Budget resolution?

• none
• budget submitted by President to Congress
• formal appropriation of funds to agencies
√ the Budget priorities established by Congress
• reconciliation of committee appropriations

47. Which of the following is not an agency of the legislative branch?

• TOFA
• Government Accountability Office
• Congressional Budget Office
√ the Office of Management and Budget
• all

48. Which of the following would reduce the level of the net debt of the federal government?

√ Run an annual surplus

• none
• Cut expenditure and raise revenue to reduce deficit from $400 billion to $100 billion
• Balance federal budget
• all

49. Which agency is responsible for external audit of federal departments and agencies?

• U.S. Treasury Office of Fiscal Accounts (TOFA)

• Shared responsibility of all three
• none
√ the Government Accountability Office (GAO)
• Congressional Budget Office (CBO)

50. Which statement about federal mandatory spending is accurate?

• Any public program with strong political support is seen as mandatory.

• none
• Because of its importance for life of nation, spending for military is regarded as mandatory.
Because appropriation bills must pass for agencies to continue operations, all spending that must go through full appropriation cycle is
• considered mandatory.
√ the spending for social security benefits is officially mandatory.

51. What is not the outcome of limit controls

 • Restrict treasury from activities that lead to capital loss
• Restrict treasury from investing in risky financial instruments
• Restrict treasury to choose the amount of business that company choose to do with a counterparty
• Restrict treasury to invest in derivatives
√ Restrict treasury staff from collection receivables

52. To what an adverse audit report will lead the treasurer department:

• Treasury`s perks will decline

• Treasury rewards
• Nothing above
• Treasury department will be terminated
√ Procedural changes

53. What is not included in treasury controls

• Someone outside of treasury function should regularly check if company pays for any unauthorized transactions
• Someone outside of treasury function should regularly compare brokerage fees to reported transactions
• Someone outside of treasury function should regularly compare commissions to reported transactions
√ All answers are correct
• Someone outside of treasury function should regularly check if company pays for any unrecorded transactions

54. What is not included in treasury controls

• Senior - level treasury manager should approve all trades

• Accounting department should reconcile all transactions
• Trade should be separated from confirmation
√ Anyone concluding the deal can control or account the resulting cash flow
• Accounting department should account all transactions

55. What is not included in treasury controls

• Accounting department should reconcile all transactions

• Duties should be segregated among treasury staff
• Anyone concluding the deal cannot control or account the resulting cash flow
√ Trade should not be separated from confirmation
• Senior - level treasury manager should approve all trades

56. What is not included in treasury controls

• There is not a correct answer above

• Duties should be segregated among treasury staff
• Anyone concluding the deal cannot control or account the resulting cash flow
√ Confirmation should be separated from accounting
• Trade should be separated from confirmation

57. Advantages of Flexible budgeting

• None of them
√ All of the options
• Coordination
• Accurate budgeting
• Control tool

58. What are the Important features of flexible budget ?

• None of them
√ All of the variants
• It is easy to change with variation in production levels
• It covers range of activity
 • It facilitates performance measurement and evaluation

59. What is Fixed budget ?

• It is based on single level of activity

√ All of the variants
• It compares data from actual operations with single level of activity reflected in budget
• Fixed budget is designed to remain unchanged irrespective of level of activity actually attained
• Fixed budget is good for performance measurement, if output can be estimated within close limits

60. What is Master Budget

• It is summary or total budget package for business firm

• It cuts across divisional boundaries to coordinate firms’ diverse activities
√ All of the options
• operating budgets constitute building block used to complete master budget

61. What is Cash budget ?

• Helps in planning bond redemptions, income tax installments and payments to employees
√ All of the options
• Indicates availability of cash
• It indicates effect on cash positions of seasonal requirements, unusual receipts and slowness in collecting receivables
• Shows availability of excess funds for short term investments

62. Which can not be a period for Cash budget :

• Long
√ A Mid
• Operational
• None of them
• Short

63. Research and Development budget is

• tool for planning and controlling research and development costs

√ All of the options
• Helps in planning staff and equipment requirements for R&D
• None of them
• Helps in coordination with company’s other plans and projects

64. Production cost budget is made up of :

• None of them
√ All of the options
• Direct labor budget
• Direct materials budget
• Factory overhead budget

65. hich of the following is classification of budget according to flexibility ?

• R&D budget
√ A Flexible budget
• Short term budget
• Long term budget
• Master budget

66. Which of the following is classification of budget according to time ?

• Fixed budget
 √ A Long term budget
• Production budget
• Sales budget
• Cash budget

67. A risk of the budget planning process is the budgetary slack. What does it mean?

• It means managers focus too much on numbers and ignore qualitative aspects that should be analyzed in budget development
√ It means managers may force a reduced revenue potential, and an overestimated expense accounts at the same time, to try to look
overperforming
• It means business unit managers ignore what corporate managers define as strategic guidelines
• All of them
• It means managers try to assess precisely what goals and targets should be

After the budget planning is done, there may occur some limitations in the planned roll-out. Which of the phrases below is a good
68. example of a limitation?

• None of them
√ The decision-making process may become inflexible, due to the supposed best options included in the budget plan
• budget contains numbers, and they help managers to focus on qualitative aspects of business operations
• After budget is done, there are no limitations that can emerge because they come from incompleteness of budget
• availability of budget may induce managers to focus on long-term time horizon, which is not good

The transition between the strategy at the corporate level to strategy at the business level is a senior management responsibility. In this
69. sense, managers have to focus on coordinating resource allocation to the most profitable initiatives. Which of the statements below best
describes this process?

• This transition could be made unnecessary, by going into details when analyzing and formulating strategy at corporate level
At business unit level, managers can address each of strategic guidelines as they were integrated. In sense that whatever comes out from
• analysis on each one isolated, outcomes will not conflict with outcomes of any other guideline analysis.
√ The budgeting process in organization develops an attitude of expenditure consciousness, stimulating the efficient use of resources, and
creating an environment of profit-mindedness throughout the organization
• All of them

What happens to the strategic guidelines when managers, at the business unit level, incorporate them to formulate and roll-out the
70. strategy?

• At business unit level, managers should develop their vision on what unit's strategy should be
√ The strategic guidelines drive the definition of how the forecasts at the strategic level will be converted into the business unit's budget
• None of them
• Managers at business unit level choose guidelines that are more related to their business unit
• They are applied as is, so that managers support their decisions on which projects and programs should go forward in budget

71. At what level managers define the main guidelines, decisions on new markets, new products, and long-term capital budget?

• All of them
• At operational level because managers of this level know better what challenges can impact within company
√ At the corporate level strategy analysis
• At business unit level strategy analysis
• None of other alternatives bring correct answer to question

72. Which of the options below describes the reactive planning cycle?

• approach in which every quarter managers should review plan

• It's predefined cycle that allows changes only during particular period of cycle
• None of them
√ Managers change the business unit tactical plan, due to significant changes in the market conditions
• It's method of planning recommended in case company operates in very stable sector

73. What are the challenges for performance budgeting ?

• Cost must be tracked

 • Need for agreement
• Information overload
• Outcome measurement
√ All of the options

74. performance budgeting principles :

• Reporting
• Strategic planning
• Performance measures
√ All of the options
• Flexible execution

75. Which is not one of the Additional Forms of Budget Classification ?

• All of them
• Source of financing
√ An Economic
• Program
• Geographical location

76. Which is not one of the main types of budget classification?

• Administrative
• Functional
• Economic
√ A Program
• All of them

77. What are the core functions of budget ?

• Efficient resource allocation across sectors

• policy formulation and performance analysis
• Strategic planning
√ All of the options
• Compliance with budgetary resources appropriated by parliament

78. Preconditions for the Successful Implementation of a New Budget Classification :

• Political ownership
• None of them
√ All of the options
• IT systems
• Technical capacity

79. What are Additional Forms of Budget Classification ?

• Sources of financing
• Geographical location
• Beneficiaries
√ All of the options
• None of them

80. What are the main types of budget classification?

• None of them
• Economic
• Functional
√ All of the variants
• administrative
81. What are the main features of a sound budget classification?

• principle of unity
• Principle of comprehensiveness
• None of them
√ All of the options
• principle of internal consistency

82. Which one can improve on the inherent control of a physical sweep system?

• management of cash
√ Verify the calculation of intercompany loan balances
• overlay structures
• clear excess balance
• standing authorizations

83. Whatt is the policy of cash concentration in the small-companies?

• cross currency notional pooling

√ a physical sweeping
• manual transfers
• overlay concentration
• target balances

84. Managed by corporate treasury department:

• cash concentration
√ the cash concentration policies
• intraday basis
• expense allocations
• complete decentralization

85. Why notional pooling is better than sweeping?

• legal in all countries

• require use of foreign exchange transaction
• have adverse tax consequences in some countries
√ a great reduction in the amount of intercompany loans
• to conducting no cash concentration activities

86. Account balance above excess funds are swept out:

• constant balancing
√ a trigger balance
• notional pooling
• zero-balance account
• intraday basis

87. Choose the false answer: treasury centralization stage 4 includes following activities:

• A central staff manages bank accounts

√ A central staff manages receivable collection
• A central staff manages hedging
• A central staff manages investments
• A central staff manages foreign exchange positions

88. Choose the false answer: treasury centralization stage 3 includes following activities

• A central staff manages bank accounts

 √ A central staff manages account payables
• A central staff manages hedging
• A central staff manages investments
• A central staff manages foreign exchange positions

89. Treasury centralization stage 3 includes following activities

• Local locations manage their own bank accounts

√ Local locations manage their own customer credit
• Local locations manage their own borrowings
• Local locations manage their own hedging activities
• Local locations manage their own investments

90. Treasury centralization stage 2 includes following activities

• Local locations do not manage their own bank accounts

√ Local locations do not manage their own hedging activities
• Local locations do not manage their own payables
• Local locations do not manage their own borrowings
• Local locations do not manage their own customer credit

91. Treasury centralization stage 2 does not include the following activity

• A central staff nets payments between subsidiaries

√ Local locations manage interest rate risk
• Local locations still manage their own bank accounts
• Local locations still manage their own customer credit
• A central staff hedges major foreign exchange

92. What is a false statement: under the first stage of centralization of treasury activities

• Individual locations manage their own bank accounts

√ All answers are wrong
• Individual locations manage their own bank accounts
• Individual locations manage their own foreign exchange transactions
• Individual locations manage their own investments

93. Centralization of treasury activities stage 1 consists of

• Individual locations does not manage their own bank accounts

√ Individual locations does manage their own borrowing
• Individual locations does not manage their own customer credit
• Individual locations does not manage their own account payables
• Individual locations does not manage their own foreign exchange transactions

94. In which conditions ERP becomes increasingly difficult for a centralized treasury staff

• If company does not have any subsidiary

√ If a company has many subsidiaries, each of which uses its own ERP and accounting system
• If company uses central accounting system
• In all listed conditions ERP becomes difficult for a centralized treasury staff
• If company uses central ERP system

95. Why ERP is useful

• ERP system processes all of the transactions used to run all key operations of a company
√ All answers are correct
• A centralized treasury group will find that all of the in - house information it requires is available through the nearest computer terminal
• Under ERP system all of the information needed for foreign exchange positions can be derived from a single system
• Under ERP system all of the information needed to derive cash forecasts can be derived from a single system
96. What is not the reason for the treasury centralization

• the presence of an enterprise resources planning (ERP) system

√ There is generally worse management oversight, and the internal audit staff can review operations in single location
• Procedural oversight progressively more difficult when it is distributed over a large number of locations
• Centralization is easier, because transactions are handled in higher volumes by a smaller number of highly skilled staff
• Procedural oversight is much easier when the treasury function is highly centralized

97. Choose the correct statement:

• Procedural oversight is much easier when it is distributed over a large number of locations
√ Procedural oversight is much easier when the treasury function is highly centralized
• There is generally worse management oversight, and the internal audit staff can review operations in single location
treasury activities frequently involve complicated terminology that is incomprehensible to non-treasury specialists, so it does not make
• sense to centralize operations into a small, well - trained group
• Centralization is more complicated, because transactions are handled in higher volumes by a smaller number of highly skilled staff

98. Choose the false statement

• treasury responsibilities are handled by the accounting

√ In a small company, the treasury department is required
• in big companies treasurers deal with pooling and netting
• treasurer usually reports to CFO or to the board of directors
• treasury responsibilities are under the supervision of the controller

99. Choose the false statement

• In a small company, there is no treasury department at all

√ as a company grows, the need for a specialized treasury staff declines
• treasury responsibilities are under the supervision of the controller
• in big companies treasurers deal with pooling and netting
• treasury responsibilities are handled by the accounting

100. Treasury job does not description consists of

• Cash flow forecasting

√ Account receivable collection
• Investment activities
• Hedging
• Maintain banking relationships

101. What is the wrong answer

• Limit controls may be applied on certain currencies

√ Treasurer`s activities should not be limited within the company
• Limit controls may be applied on the amount of business that company choose to do with a counterparty
• Restrict treasury from investing in risky financial instruments
• There should be monetary caps on the transaction totals to which anyone in the treasury department can commit the company

102. To say that the forward market lacks liquidity means that

• forward contracts cannot be sold for cash.

• none of above.
• forward contracts usually result in losses.
• forward contracts cannot be turned into cash.
√ it may be difficult to make the transaction

103. On the expiration date of a futures contract, the price of the contract
 • cannot be determined.
• always equals average price over life of contract.
• always equals purchase price of contract.
√ always equals the price of the underlying asset.
• always equals average of purchase price and price of underlying asset.

104. The price of a futures contract at the expiration date of the contract

• equals price of counterparty

• none of above.
• equals value of hedged asset
√ equals the price of the underlying asset.
• equals hedge position.

105. Hedging by buying an option

√ the limits losses.

• limits gains and losses
• limits gains.
• has no limit on option premiums.
• has no limit on losses.

106. The problems of default risk and finding counterparties for interest rate swaps has been reduced by

√ the commercial and investment banks serving as intermediaries.

• writing complex contracts.
• government regulation.
• all of above
• none of above

107. A disadvantage of using swaps to control interest rate risk is that

• only two of above are disadvantages of swaps.

• swaps cannot be written for long horizons.
• swaps are more expensive than restructuring balance sheets.
√ swaps, like a forward contracts, lack liquidity.
• all of above are disadvantages of swaps.

108. A advantage of using swaps to hedge interest rate risk is that swaps

• are more liquid than futures.

√ can be written for the long horizons
• are less costly than futures.
• are not subject to default risk.
• have better accounting treatment than options.

109. A tool for managing interest rate risk that requires exchange of payment streams is a

• micro hedge
• macro hedge
• futures contract
√ the swap
• forward contract

110. Which of the following features of futures contracts were not designed to increase liquidity?

• all of them
• Not tied to one specific type of bond
• Traded up until maturity
√ Can be closed with off a setting trade
 • Standardized contracts

111. Elimination of riskless profit opportunities in the futures market is

• underwriting.
• hedging
• speculation
√ an arbitrage
• diversification.

112. A disadvantage of a forward contract is that

• both (a) and (c) of above

√ all the answers are true
• forward market suffers from lack of liquidity.
• it may be difficult to locate counterparty
• these contracts have default risk.

113. Hedging risk for a long position is accomplished by

• none of them
• taking additional long and short positions in equal amounts
• taking another long position
√ taking a short position
• taking neutral position

114. Financial derivatives include

• stocks
• bonds
• none of them
• all of them
√ the futures

115. The payoffs for financial derivatives are linked to

• securities that will be issued in future.

• none of above.
• volatility of interest rates.
√ the previously issued securities
• government regulations specifying allowable rates of return.

An investor may submit signed documents indicating that he is investing, but not transfer funds to the escrow agent. Which type of
116. controls of regulation D stock sales does this case belong to?

• specify escrow cap

√ verify a cash receipt
• review outgoing subscription agreement
• review disqualification provisions
• update offering circular

Regulation A does not allow for the issuance of more than $5 million in aggregate per year, of which no more than $1.5 million can be a
117. secondary offering. To ensure that these limitations are not exceeded, impose a cap on the amount of funds to be accepted by the
escrow, beyond which funds will be returned to investors. Which type of controls of regulation A stock sales does this case belong to?

• review disqualification provisions

√ specify an escrow cap
• update offering circular
• review outgoing subscription agreement
• control release of offering circular
118. Which one refers to Regulation D stock saless?

• update offering circular

√ verifing a cash receipt
• review disqualifi cation provisions
• specify escrow cap
• verify contents of security authorization letter

119. Which one refers to Regulation A stock saless?

• verify available authorized shares

√ submit “ test the waters ”documents to counsel
• have due diligence officer review all SEC filings
• verify contents of security authorization letter
• verify board authorization

120. Which one refers to general stock sale controls?

• review disqualification provisions

√ verifing the available authorized shares
• submit advertising to counsel
• update offering circular
• control release of offering circular

121. A par value is

• lower price than what company's performance may otherwise indicate

√ a minimum price below which the stock cannot be sold
• esultant amount after accounting for sum or difference of two or more variables
• value of all assets, minus total of all liabilities
• amount it would cost to buy one share in company

122. Which form involves a relatively minor amount of SEC notification?

• only regulation A
√ only the regulation D
• form S - 1
• none of above
• both regulations A and regulation D

123. Which form does a company use when is ready to notify the SEC of securities sales under regulation?

• Form S - 1
√ a Form 1 - A
• none of above
• 8 - K report
• Form S - 3

124. Whom is a registration statement reviewed by?

• by investor manager
√ by the SEC staff
• by portfolio manager
• by financial analyzer
• by investment director

A shelf registration must be declared effective by the SEC before any securities sales related to it can be initiated. However, the SEC ’ s
125. Rule 462(e) allows for some registration statements to be declared effective immediately upon their dates of fi ling. Whom this
automatic shelf registration is available to?
 • to yearly issuers
√ to the well - known seasoned issuers
• to bond sellers
• to stock beneficiaries
• to investment directors

126. … allows a company to incorporate a large amount of information into the form by reference

• Form S - 1
√ the Form S - 3
• 8 - K report
• none of above
• Regulation S-K

Which one of the following contents refer to Form S-1?

Forepart of registration statement
Summary information
127. Dilution
Description of securities to be registered
Information with respect to registrant

• Information with respect to registrant

√ All
• Dilution
• Summary information
• Description of securities to be registered

128. Which is the best sweep when company uses intraday sweeping transactions?

• constant balancing
√ end-of-the-day sweeps
• loan balances
• single-currency-center model
• cross-border cash pool

129. Which is true for physical sweeping?

• It is not allowed in some countries in Africa, Asia, Latin America

√ It is also possible to use constant balancing to maintain a predetermined
minimum balance
• Higher interest rates bcs. of separate investments
• No need for recording of intercompany loans
• maybe regulated by local laws

130. One of the givens is NOT a cash concentration strategy:

• all functions centralized

• complete decentralization
• decentralized liquidity management
√ the allocation of interest income to subsidiaries
• responsibility for disbursements

131. Wire transfers represent a "real-time transfer of account balances." This implies that:

• treasurer is likely to follow benefits

• there is no charge to user
• user does not have to keep compensating balances
√ there is not a availability float
• there are very large dual balances
132. Which is the concentration transfer tool?

• review target balances

• idle cash balances
• improved ROI
√ the wire transfer
• excluded accounts

133. One of the benefits of cash concentration:

• dividing balances
√ cost-effective overisight of the accounts
• track all accounts
• clarify company costs
• calculate allocatable income

134. What is the key factor in product design

• product itself and its packge

√ the number of product options
• material and size of product
• colour and temperature
• package

135. A bill of materials is

• check
√ Record of the materials used to construct a product
• invoice
• inventory
• type of bill

136. How long the company is funding the inventory

• for 1 month
√ The inventory founding as long as it sits in the warehouse waiting for a customer order
• is not funding
• 15 days only
• 1 year

137. When invoices shoud be issued?

• after 1 month
√ Invoices should be issued immediately after the
related goods or services have been provided
• after 15 days
• should not be issued
• before services are provided

138. Which departament manages payable process

• Operations and Control departament

√ The Accounting Departament
• Procurement departament
• Human Resources
• Compliance Departament

139. What is best method for decrease the cost of keeping inventory in stock?

• reject all deliveries

 √ Drop the shipping
• lockbox system
• bulk purchases
• additional funding

140. What is the less liquid component of working capital?

• accounts receivable
√ An Inventory
• cash
• accounts payable
• accounts payable

141. What require guarantees means in credit management controls?

• security agreement
√ As a personal guarantee by owner or letter of credit
• reviewing of customer credit
• reexamination of credit
• guarantee by third party

142. Choose credit management policies

• Multitude of internal policies, controls, and systems

√ Loose the credit policy and Tight Credit policy
• single payment and collateral
• annual percentage rate
• investing policy

143. What are the primary components of working capital?

• assets and liabilities

√ Cash,the accounts receivable, inventory and accounts payable
• account receivable
• cash
• only cash and accounts receivable

144. Through which system treasurer requires information that is not normally available?

• ECH system
√ the EPR system
• CLS system
• CHIPS system
• ACH system

Treasurer's technology needs includes:

1.Cash position
2.Audit trail
145. 3.Segretation of duties
4.Foreign exchange transactions
5.Hedging

• 1,3,5
√ 1,4,5
• 3,4,5
• 2,4,5
• 2,3,5

146. Is access to the SWIFT network important for larger companies?

• No, as such systems will eventually call for implementation of formal treasury systems
 • No, increased availability of SWIFT network to corporations makes it possible to engage in high degree of transactional automation
• none of above
• No, as they cannot link their treasury management systems directly into SWIFT network
√ Yes, because they can link their treasury management systems directly into the SWIFT network

147. Which of the following is an example of budget expenditure

• Defense
√ all of them
• Social Policy
• International activity
• R&D

148. Structure of State Budget includes

• Only budget revenues

√ Budget expenditures and Budget revenues
• Only tax revenues
• none of them
• Only budget expenditures

149. Income from the use of property is an example of:

• tax revenue
√ non-tax revenue
• Dividend
• all of them
• interbudgetary transfer

150. Which of the following is not true about grants

• Their use has no spesific purpose

√ Funds provided by one budget to another one, person or entity on the terms of co-financing of targeted expenditures
• Funds provided on a gratuitous and irrevocable basis without setting directions and conditions of use
• all of them
• Grant funds are directed to cover the current budget expenditures or just to provide financial support

151. Which of the following is NOT true?

• Reproductive subfunction is designed to accumulate funds for the recovery of the resources used
√ Increasing taxes stimulates the growth of aggregate demand and supply
• Income from use of property is an example of non tax revenue
• all of them
Control function allows the government to monitor the timeliness and completeness of the revenues to the state budget and match their
• size

152. Which of the following is considered as interbudgetary transfer?

√ subventions
• dividend
• borrowings
• none of them
• all of them

153. Which of the following is not considered as interbudgetary transfer?

• subventions
• budget loans
• grants
√ government borrowings
 • subsidies

154. … means less tax rate for high income earners and high tax rate for less income earners

• progressive tax rate

• none of them
• equal tax rate
√ regressive tax rate
• proportional tax rate

155. …. means less tax rate for less income, high tax rate for high income

√ progressive tax rate

• regressive tax rate
• proportional tax rate
• equal tax rate
• none of them

How many of given below refers to methods that companies are able to access the SWIFT network?
Standardized corporate environment
156. Member - administered closed user group
Alliance lite
SWIFT bureaus

• 2
• 0
• all
√ 1
• 3

A company can subsist on spreadsheet - based systems if it engages in a trifl ing number of treasury transactions. Do you agree with this
157. statement?

• none of above
• No, as such systems will eventually call for implementation of formal treasury systems
√ Yes, as it will soon find with increased volume that the amount of rote data entry labor and outright errors
• A company cannot subsist on spreadsheet - based systems if it engages trifling number of treasury transactions
• No, increased availability of SWIFT network to corporations makes it possible to engage in high degree of transactional automation

158. Who is a tresurer?

• treasurer establishes only reasonable set of prioritie

• treasurer only and frequently prioritizes information needs
• none of above
• treasurer only settles with notional accounts
√ the treasurer is in the diffi cult position of requiring information from many sources, most of which are not required by any other
company manager

159. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) …

• have set up their own access to SWIFT network and allow companies access through their systems for per - transaction fee
√ operates a worldwide network that banks use to exchange standardized electronic messages that are known as SWIFT MT codes
• may call for membership in multiple MA - CUGs, which is less convenient than SCORE method
• can join separate MA - CUG for each bank with which it wishes to communicate
• ommunicate with all member banks in closed user group

160. "Warning indicators" is a type of control issue where …

all treasury transactions should result in clearly defined audit trail that identifies who made transaction and date, amount, and accounts
• impacted by transaction
• system should automatically notify users if transaction confirmations have not been received
• system should electronically route pertinent transaction to correct supervisor for approval
 √ the system should automatically notify users if transaction confrmations have not been received, if hedging policies are being violated, if
there are negative cash balances, and so on
• system should never require manual entry of transaction into system more than once

161. Proceeds from the sale of property is an example of:

• tax revenue
• Dividend
• all of them
√ non-tax revenue
• gratuitous receipts

162. Control function…

√ Allows the government to monitor the timeliness and completeness of the revenues to the state budget and match their size
• none of them
It re-distributes public revenues – transfers funds in favour of vulnerable and unprotected categories of citizens by imposing a tax
• burden on the stronger categories of the population
• Addresses various problems of economic policy via fiscal mechanisms
• collecting money to generate public money funds and material conditions for the functioning of the state

163. Destimulating subfunction is…

√ aimed at establishing obstacles, by tax burden, to the development of any economic processes
• All of them are true
• none of them
• supports the development of certain economic processes. It is implemented through a system of privileges and exemptions
• designed to accumulate funds for the recovery of the resources used

164. Regulatory feature of taxes means that

• none of them
• all of them
• collecting money to generate public money funds and material conditions for the functioning of the state
maintaining social balance by changing the proportion between the incomes of certain social groups in order to smooth out inequalities
• between them
√ Addresses various problems of economic policy via fiscal mechanisms

165. Fiscal feauture of taxes means that:

maintaining social balance by changing the proportion between the incomes of certain social groups in order to smooth out inequalities
• between them
• all of them
• none of them
√ collecting money to generate public money funds and material conditions for the functioning of the state
• Addresses various problems of economic policy via fiscal mechanisms

166. Find the correct definition: Budgetary loans are ...

• Funds provided on a gratuitous and irrevocable basis without setting directions of use
√ Form of financing budget expenditures, which provides granting of funds to other legal entities budget on a non-gratuitous and
revocable basis
Funds provided by a higher-level budget to a lower level budget or entity on a gratuitous and irrevocable basis for the implementation of
• specific targeted purposes
• None of them
• Funds provided by one budget to another one, person or entity on the terms of co-financing of targeted expenditures

167. Find the correct definition: Subventions are ...

Form of financing budget expenditures, which provides granting of funds to other legal entities budget on a non-gratuitous and
• revocable basis
• None of them
 • Funds provided on a gratuitous and irrevocable basis without setting directions of use
• Funds provided by one budget to another one, person or entity on the terms of co-financing of targeted expenditures
√ Funds provided by a higher-level budget to a lower level budget or entity on a gratuitous and irrevocable basis for the implementation of
specific targeted purposes

168. Find the correct definition: Subsidies are ...

Form of financing budget expenditures, which provides granting of funds to other legal entities budget on a non-gratuitous and
• revocable basis
√ Funds provided by one budget to another one, person or entity on the terms of co-financing of targeted expenditures
Funds provided by a higher-level budget to a lower level budget or entity on a gratuitous and irrevocable basis for the implementation of
• specific targeted purposes
• Funds provided on a gratuitous and irrevocable basis without setting directions of use
• None of them

169. "Segregation of duties" is a type of control issue where …

√ the system should limit access to certain modules and require approval of key transactions
• system should never require manual entry of transaction into system more than once
all treasury transactions should result in clearly defined audit trail that identifies who made transaction and date, amount, and accounts
• impacted by transaction
• system should electronically route pertinent transaction to correct supervisor for approval
• system should automatically notify users if transaction confirmations have not been received

170. "Audit trail" is a type of control issue where …

• system should automatically notify users if transaction confirmations have not been received
• system should never require manual entry of transaction into system more than once
• system should electronically route pertinent transaction to correct supervisor for approval
√ all treasury transactions should result in a clearly defned audit trail that identifies who made a transaction and the date, amount, and
accounts impacted by the transaction.
• system should limit access to certain modules and require approval of key transactions

If supervisory approval is required, the system should electronically route the pertinent transaction to the correct supervisor for
171. approval. Which efficiency issue is described?

• audit trail
• minimize data entry
• warning indicators
• segregation of duties
√ the work flow processing

172. The system should never require the manual entry of a transaction into the system more than once, so, it means it has to

• not prefer automated data

• route pertinent transaction
• correct supervisor
√ minimize a data entry
• do manual entry

Which of the technologies needs treasurer for the following case: Some companies have so little foreign business that foreign exchange
173. transactions are negligible, but larger firms
with established treasury operations will likely need the ongoing purchase and sale of multiple currencies ?

• debt management
• cash forecasting and reconciliation of actual to projected cash flows
• funds transfer capability
√ foreign exchange the transactions
• interest income calculation

174. Which of the following is NOT a technology of cash position?

 √ a foreign exchange forecasting and position analysis
• cash forecasting and reconciliation of actual to projected cash flows
• funds transfer capability
• interest income calculation
• debt management

175. What else does an enterprise resources planning (ERP) system's tresurer requires regarding investments?

• none of above
• only ForEx positions
• only interest rates
√ information from a variety of external sources
• only ForEx gain/loss

176. Find the correct definition: Grants are ...

• None of them
• Funds provided by one budget to another one, person or entity on the terms of co-financing of targeted expenditures
Funds provided by a higher-level budget to a lower level budget or entity on a gratuitous and irrevocable basis for the implementation of
• specific targeted purposes
√ Funds provided on a gratuitous and irrevocable basis without setting directions of use
Form of financing budget expenditures, which provides granting of funds to other legal entities budget on a non-gratuitous and
• revocable basis

177. Gratutious receipts include receipts from …

• International organizations
• Individuals
• Legal entities
√ All of them
• Foreign governments

178. Which one is not considered inter-budgetary transfer?

• subventions
• budget loans
• grants
• subsidies
√ tax collection

179. When carrying out contractionary economic policy, the government …

• reduces taxes
• none of them
• all of them
√ raises taxes
• increases government expenditure

180. When carrying out stimulating economic policy, the government …

• all of them
• increases taxes
• decreases government expenditure
√ reduces taxes
• none of them

181. Fill the blanks: "The less taxes are paid, the … disposable … remains for consumption."

• All of them are true

• Less, expenditure
 √ More, income
• More, expenditure
• Less, income

182. Which one is the subfunction of regulatory feature of taxes?

√ All of them
• Reproductive
• None of them
• Stimulating
• Destimulating

183. Which of the following is the major feature of taxes?

• Fiscal
• None of them
√ All of them
• Regulatory
• Social

184. Which one is not true about the taxes?

• Its payment period is predetermined

• None of them
• It is mandatory payment
• Its amount is predetermined
√ It is voluntary payment

185. What are the main revenue categories of the budget?

• Only tax proceeds and fines

• None of them
• Only tax revenues and non-tax revenues
• Only tax revenues and dividends received
√ Tax revenues, non-tax revenues, gratuitous receipts

186. What is the main source of non-tax revenues?

• Fines
√ Municipal property use
• Fines
• Duties
• Dividend

187. Which one of the following is not an example of non-tax revenue?

• proceeds from the sale of property

• Fines
• revenues from paid services provided by agencies
√ tax on commodities
• income from the use of property

188. Which one of the following is an example of non-tax revenue?

• Duties
• Income tax
• Proceeds of taxes
√ Income from the use of property
• Tax on commodities
189. Which is about credit rating agencies?

• Used for sale of corporate building

• Company sells onw of its assets to lender and then immediately leases it back for guaranteed minimum time period
• Company obtain cash from sale of asset
√ Having a credit score is essentially mandatory
• Creates special purpose entity

190. Call future:

• Bonds are recommended for large organizations

• Company can buy back some fixed proportion of all bonds at regular intervals, under which investors will be paid back sooner
• When repayment is positioned last among creditors
√ That allows to a company to buy back bonds at a set price within certain future time frames
• It is form of short-term loan that is granted by lending intitutions

191. What is convertible bond?

√ A bond that can be converted to stock using a predetermined conversion ratio

• Bond that uses as collateral company's security investment
• Pays interest only if income has been earned
• This bond allow purchasers to convert them to common stock
• This kind of bond is associated with firms firms having short-term cash flow

192. Which answer is about Line of credit?

• Leasing option is most useful for those companies that want to establish collateral agreements only for specific assets.
• Price of assets shouldn’t be lower than price that lender originally paid for it on behalf of distributor
• Under this arrangement all inventory is used as collateral for loan from finance company
√ It is a commitment from a lender to pay company whenever it need cash, up to preset maximum level
• Future operating lease payments are not listed on balance sheet as liability

193. Which is not a type of loan?

• Registered bonds
• Asset-based loan
• Coupon bond
• Convertible bond
√ The liability-based loans

194. Which are the types of lease?

• Budget lease, treasury lease

√ Capital lease,the operational lease
• Busget lease, capital lease
• Operational lease, managerial lease
• Equity lease, capital lease

195. Which statement about commercial paper is true?

• This financing option is good for smaller companies,since interest rate is not excessive
√ Company uses a commercial paper to meet its short term the working-capital obligations
• This is highly transaction intensive and expensive way to obtain funds
• It covers purchasing of specific asset
• It is commonly used in large amount of receivables

196. Treasurer should has knowledge in these fields:

• Banking system,financial markets, management

√ Debt instruments, the credit rating agencies, related accounting tools,consequents controls, policies and procuders
 • HRM, credit rating agencies, budget management
• credit rates, exchange rates. Income rates
• Exchange rates, treasury management, interest rates

197. Which are the types of the debt?

• factoring, commercial papers, liabilities

• equities, budget deficit, field warehouse financing
• lease, asset-based loans, borrowings
• floor planning, cash pool, asset, treasury bill
√ Commercial paper, the factoring, floor planning,field warehouse financing

198. Which one is not the method for check payments controls?

• Remove check stock from locked storage

√ Train for handling of the foreign checks.
• Reconcile checking account every day
• Implement positive pay.
• Require manual signature on checks exceeding predetermined amount

199. What is control method of reconciling transaction log with monthly card statement means?

If there are fewer documentation requirements under letter of credit, then it will be easier for payee to obtain payment. This must be
• negotiated with buyer prior to issuance of letter of credit.
√ Each cardholder must review his or her monthly purchases, as a itemized by the card issuer on the monthly card statement.
• Issuing bank assumes risk of buyer ’ s insolvency, so payee should insist that bank with strong credit rating be issuing bank.
Excellent detective control, this approach ensures that any fraudulently modified checks or checks not processed through standard
• accounting system will be spotted as soon as they clear bank and are posted on bank ’ s web site.
• Bank allows payee to initiate debit of payer ’ s bank account, with funds shifting into payee ’ s bank account.

200. What is letters of credit?

• Direct deposit payroll

√ Cash transfer methods that have a high probability of the payment
• Direct payment of business - to - business and consumer bills
• Recipient bank ’ s name and bank identification number
• Electronic network for processing of both credit and debit transactions within United States and Canada.

201. Which kind of payment can not be send via ACH payments?

• Direct deposit payroll

√ Money laundering the transactions
• Direct payment of business - to - business and consumer bills
• Tax refunds
• Social Security payments

202. What is ACH payments?

Way of sending funds to recipient ’s bank account more rapidly than any other form of payment, and is standard form of international
• payment.
√ Electronic network for the processing of both credit and debit transactions within the United States and Canada.
• Payments when amount is deducted directly from company ’ s bank account.
• Payments which allow payee to initiate debit of payer ’ s bank account, with funds shifting into payee ’ s bank account.
• Cash transfer methods that have high probability of payment

203. What is the main characteristic of tax subsidy?

• making more jobs available in country in order to reduce the unemployment rate
√ reducing the tax burden of certain businesses
• helping importers lower cost of shipping of goods coming into the country
 • promoting construction sector and encourage home ownership
• reducing overall price people pay to buy oil and related products

204. What is the main characteristic of employment subsidy?

• reducing tax burden of certain businesses

√ making more jobs available in a country in order to reduce the unemployment rate
• promoting the construction sector and encourage home ownership
• helping importers lower cost of shipping of goods coming into the country
• reducing overall price people pay to buy oil and related products

205. Which if the following is considered a type of subsidy?

• Food subsidy
√ All of them
• Tax subsidy
• Transport subsidy
• Education subsidy

206. Which of the following is considered an Inter-budgetary transfer?

• Grant
√ All of them
• Subvention
• Budget loans
• Subsidy

207. Which of the following is considered a characteristic for Grants?

• Their use has no specific purpose

√ All of them
• Funds provided on a gratuitous basis
• It is irrevocable
• Grant funds are directed to provide financial support

208. Which of the following is considered a type of grant?

• Student grant
• Disaster-prevention grant
• Small Business grant
√ All of them
• Research grant

209. Disadvantages of subsidies are:

• Difficulty in measuring success

√ All of them
• Shortage of supply
• Decreased production for other nations
• high rate of taxes

210. Advantages of subsidies are:

• Strengthening industries
√ All of them
• Lowering prices
• A greater supply of goods
• Controlling inflation

211. Which of the following is not considered a disadvantage of subsidies?

 • All of them
√ A greater supply of goods
• Difficulty in measuring success
• None of them
• High rate of taxes

212. Which of the following is considered a disadvantage of subsidies?

• All of them
√ Difficulty in measuring the success
• Lowering prices
• Controlling inflation
• None of them

213. How do we call the transaction with the same bank at both ends?

• Wire transfer
√ The book transfer
• Payment check
• Net float
• Bank check

214. What is a wire transfer?

Payment made on paper document, which has traditionally been physically routed from payer to payee, to payee ’s bank, and then back
• to payer ’ s bank.
√ Way of sending funds to the recipient ’ s bank account more rapidly than any other form of payment, and is the standard form of
international payment.
• Electronic network for processing of both credit and debit transactions within United States and Canada.
• Direct deposit payroll
• Payment on behalf of payer.

215. Choose the false answer: To initiate a wire, the treasury staff must send the following information to its bank:

• Sending company ’ s name, address, and account number

√ Adress of the bank's director
• Recipient bank ’ s name and bank identification number
• Amount of payment
• Recipient ’ s name and account number

216. What is net float?

• Time from when supplier receives check and deposits it

• Delay while payment is delivered through postal office
√ Combination of the floats associated with these inbound and outbound check payments
• Time between when check is deposited and when it is available to recipient
• Time between when check is deposited and when it is charged to payer ’s account

217. What is a presentation float?

• Delay while payment is delivered through postal office

√ Time between when the check is deposited and when it is charged to the payer ’ s account
• Time between when check is deposited and when it is available to recipient
• Payment on behalf of payer
• Time from when supplier receives check and deposits it

218. Choose a correct variant: the time between when the check is deposited and when it is available to the recipient

• Bank Check
 √ An availability float
• Mail float
• Presentation float
• Processing float

219. Choose a correct variant: the time from when the supplier receives the check and deposits it

• Check payment
√ The processing float
• Mail float
• Availability float
• Presentation float

220. Choose a correct variant: a delay while the payment is delivered through the postal service

• Net float
√ The mail float
• Processing float
• Presentation float
• Availability float

221. What is the bank check?

• Time between when check is deposited and when it is charged to payer’s account
√ Payment on behalf of the payer which is guaranteed by the bank.
Way of sending funds to recipient ’ s bank account more rapidly than any other form of payment, and is standard form of international
• payment.
• Cash transfer methods that have high probability of payment
• Time from when supplier receives check and deposits it

222. What is check payments?

• Payment on behalf of payer.

√ Payment made on a paper document, which has traditionally been physically routed from the payer to the payee, to the payee ’ s bank,
and then back to the payer ’ s bank.
• Time between when check is deposited and when it is available to recipient
Way of sending funds to recipient ’ s bank account more rapidly than any other form of payment, and is standard form of international
• payment.
• Delay while payment is delivered through postal office

223. Choose the correct definition for Alter Payment Terms

• Made in 15 days payment terms

√ Half of sale can be made with 15 days payment terms,the rest part in 30 dasy and etc.
• Payments are made in 1 year
• Payments are made in 1 month
• made in 30 days payments terms

224. Which of the following is not considered an advantage of subsidies?

• greater supply of goods

• None of them
• Lowering prices and controlling inflation
• Strengthening industries
√ High rate of the taxes

225. Which of the following is considered an advantage of subsidies?

• None of them
√ Preventing the long-term decline of industries
 • Higher taxes
• Shortage of supply
• Difficulty in measuring success

226. Which of the following is not considered to be an advantage of Grant?

• It doesn’t contain commitment to pay it back

• None of them
• All of them
√ Grants do not usually cover the whole cost of a project
• credit history doesn’t affect submission’s chances of success.

227. Which of the following is not considered to be a disadvantage of Grant?

• All of them
√ It doesn’t contain a commitment to pay it back
• Grants do not usually cover whole cost of a project
• None of them
• Grants are not generally awarded for projects that have already begun

228. Which of the following is considered to be a disadvantage of Grant?

• None of them
• All of them
√ Grants are not generally awarded for the projects that have already begun.
• credit history doesn’t affect submission’s chances of success
• it doesn’t contain commitment to pay it back

229. Which of the following is considered to be an advantage of Grant?

• It is necessary to find one that suits specific needs

√ It doesn’t contain a commitment to pay it back
• Grants do not usually cover whole cost of a project
• Applying for grant can be a lengthy process
• Many people, companies, and organizations apply for grants

230. Which if the following is not considered a type of grants?

• Student Grant
√ a tax Grant
• Research Grant
• Disaster Prevention Grant
• Small Business Grant

Fill in the blanks: When the government subsidizes an activity, resources such as labor, machines, and bank lending will tend to
231. gravitate __________ activity that is subsidized and will tend to gravitate ___________ activity that is not subsidized.

• toward; toward
√ toward; away from the
• away from; away from
• towards from, away
• away from; toward

232. Which of the following is not considered a characteristic about Grants?

• Funds provided on gratuitous and irrevocable basis without setting directions and (or) conditions of use
√ Their use has the certain targeted purposes
• Their use has no specific purpose
• None of them
• Grant funds are directed to provide financial support
233. Which of the following is not considered one of the Inter-budgetary transfers?

• Grants
√ the VAT refunds
• Subventions
• Budget loans
• Subsidies

234. Which if the following is not considered a type of subsidy?

• Education Subsidy
√ A war Subsidy
• Tax Subsidy
• Transport subsidy
• Food Subsidy

Which of the following is not considered one of the factors that take into consideration while assessing the appliers’ application to get
235. budget loans?

• Their savings
√ The tax debt
• Their ability to repay the loan
• Their circumstances
• Any existing budgeting loan that they owe

236. What is a grant?

• based on particular traits

√ gift of the money that does not have to be repaid
• based on ancestral background
• All of them
• gift of money you have to pay back

Fill in the blanks: Wage subsidies ____ demand for labor and the number of low skilled jobs. The minimum wage laws ____ the
237. demand for labor and the number of low skilled jobs.

• increase; increase
√ increase the; decrease
• decrease; decrease
• increase; remain stable
• decrease; increase

238. Purchasing,Manufacturing planning and warehousing are conntrolled by

• Audit departament
√ The material management departament
• Operations and Control Departament
• Human Resources
• Compliance Departament

239. What can change the size of a working capital?

• internal policies only

√ Multitude of the internal policies, controls, and systems
• policies and system
• none of hose above
• systems only

240. One of the largest uses of cash within a company is

 • debt
√ A working capital
• trading
• cash
• equity

241. Inventory turnover formula

• Cost of goods sold/Sales

√ Cost of the goods sold/İnventory
• Cost of goods sold/Accounts receivable
• Cost of goods sold/Asset
• Cost of goods sold/Cash

242. Which one of the following options is a real-life example of a wage subsidy?

• minimum wage
• All of them
• Food stamps (SNAP)
• Housing assistance
√ The Earned Income Tax Credit

243. What effect do wage subsidies have on employment?

√ Wage subsidies increase the employment

• Wage subsidies have no effect on employment
• Wage subsidies increase unemployment
• Wage subsidies decrease employment
• All of them

244. Which is not an advantage of subsidies?

• None of them
• To keep prices down and control inflation
• Reduce cost of capital investment projects
√ The cost will have to be met through the taxation
• Helps poorer families.

245. A subsidy is an amount of money given directly to firms by the government to encourage

• All of them
• Oligopolies
• Price volatility
• Monopolies
√ Production and the consumption

246. Which of the following contains a true explanation of subsidies?

• reduce level of public sector debt.

• All of them
• are included in federal government revenue.
• reduce size of existing budget deficit.
√ add to the size of an existing government deficit.

247. A subsidy could best be defined as a

• price-based form of protection that raises revenue for government

• None of them
• quantitative restriction that gives local firms bigger share of the domestic market.
 • form of protection that reduces production costs and raises revenue for government
√ type of protection that is a form of government expenditure and so is likely to be regularly reviewed

248. Which of the following is a Statutory Body?

• None of these
√ Finance Commission
• State Planning Board
• Planning Commission
• none of the above

249. The Annual Account of both the income and expenditure is called:

• Manifesto
√ Budget
• Accounts
• Plan
• none of the above

250. The Great Depression occurred during:

• 1919-23
√ 1929-33
• 1901-05
• 1949-53
• none of the above

251. Deficit financing may lead to:

• Deflation
√ Inflation
• Unemployment
• Poverty
• none of the above

252. The basic principle of public finance is:

• All of the above

√ Maximum Social Advantage
• Welfare of the Govt.
• Welfare of the Individual
• All of the above

253. Merit goods means:

• White good
√ Free good
• Public good
• Rare good
• All of the above

254. What is a Government Budget?

√ A statement that shows estimated government receipts and estimated government expenditure under various heads during a given year
• A statement that shows an ability of the government to intervene in economy
• A statement that shows government ability to provide public services
• All of the above
• A statement that shows tax collection performance of the government

255. What are budget receipts?

 • the estimated receipts of the government from private sector in an accounting year
√ the estimated receipts of the government from all sources in an accounting year
• taxes
• grants
• All of the above

256. What is a balanced government budget?

• Estimated revenues exceeds estimated expenditures

√ Estimated revenues are equal to estimated expenditure
• Estimated revenues are estimated expenditures neutral
• Estimated expenditures exceeds estimated revenues
• all of them

257. What is a surplus government budget?

• Estimated revenues are estimated expenditures neutral

√ Estimated revenues are more than the estimated expenditures
• Estimated revenues are equal the estimated expenditures
• Estimated revenues are less than the estimated expenditures
• none of the above

258. What is a budgetary deficit?

• The excess of public receipts over private ones

√ The excess of total expenditure over total receipts
• All of them
• The excess of private receipts over public ones
• The excess of total receipts over total expenditures

259. What are the consequences of budget deficit?

• The real interest rate is neutral

√ The real interest rate rises
• All of them
• The real interest rate is volatile
• The real interest rate falls

260. What are the consequences of budget deficit?

• The national saving is neutral

√ The national saving falls
• All of them
• The national saving is volatile
• The national saving rises

261. What are the consequences of budget deficit?

• The investment rises

√ The investment falls
• All of them
• The investment is volatile
• The investment is neutral

262. What are the consequences of budget deficit?

• The exchange rate is neutral

√ The exchange rate appreciates
• none of them
 • The exchange rate is volatile
• The exchange rate depreciates

263. What are the consequences of budget deficit?

• The net export rises

√ The net export falls
• All of them
• The net export is neutral
• The net export is volatile

264. Structural budget deficit is a

• government fiscal position at the level of the full potential GDP

√ government fiscal position with short term factors removed
• All of them
• government fiscal position based on cash accounting method
• government fiscal position based on capital accounting method

265. Cyclically adjusted budget deficit is

• government fiscal position with short term removed factors

√ government fiscal position at the level of the full potential GDP
• none of them
• government fiscal position based on capital accounting method
• government fiscal position based on cash accounting method

266. Cash accounting method is a

• fiscal position that measures cash flow in the economy

• fiscal position that accounts for changes in the value of the government’s net asset holdings
• none of them
√ fiscal position as the difference between current spending and current revenue
• fiscal position that measures public debt statement

267. Capital accounting method is a

• fiscal position that measures public debt statement

fiscal position as the difference between current spending and current revenue
• fiscal position that measures public debt statement
• fiscal position that measures cash flow in the economy
√ fiscal position that accounts for changes in the value of the government’s net asset holdings
• none of them

268. Budget inputs is

• none of them
• ballocation of funds referring on the character of use
• allocation of funds referring on the impact of the results
√ allocation of funds for a specific use
• measuring the efficiency of the allocation

269. Budget outputs is

• ultimate result of the allocation of funds

• measuring the efficiency of the allocation
• allocation of funds for a specific use
• none of them
√ referring to how inputs are used
270. Budget outcomes is

• none of them
• ultimate result of the allocation of funds
√ refers to the impact or result of budget inputs and outputs
• allocation of funds for a specific use
• refers to how inputs are used

271. Which one is NOT a responsible government component?

• Democracy
• Separation of power
• Elections
√ Federal and local budgets
• none of them

272. Which one explains budgets as preferences?

• Allocation of funds to promote market equilibrium

• none of them
√ Allocation of funds among different group of people
• Allocation of funds to encourage economic growth
• Allocation of funds to serve external debt

273. Which one is NOT a budget component?

• Budget constraint
• Budget surplus
√ Interest rate
• All of them
• Budget revenues

274. Fiscal capacity is

• A measure of ability to finance budget deficit

• A measure of ability to manage budget surplus
√ A measure of ability to finance government provided services
• A measure of ability to finance government social programs
• All of them

275. Fiscal capacity is NOT depending on

• Economic growth
• Revenues
√ Export potential
• All of them
• Assets

276. With a "rainy day" savings fund, you:

• All of them
• Put a fixed amount of money into a savings account each time it rains
• Set aside money to use to treat yourself to something special when the weather turns bad
• Save up money to buy an umbrella and other types of rain gear
√ Set aside money for emergencies or essential spending in case of a loss of income

277. What is NOT a purpose or goal of any natural resource fund in the world, like SOFAZ

• Reducing the effects of ‘Dutch Disease’ by investing oil money outside the country
• Stabilizing the government’s budget or protecting the budget from oil revenue volatility
 • none of them
√ Pay for government debt
• Saving oil revenues for the benefit of future generations

278. The source of SOFAZ revenues are

• Budget surpluses
• All above of them
√ Revenues from profit oil&gas sell
• Exchange rate operations
• The Central Bank reserves

279. Which one is a SOFAZ financed project?

• Not one of them

• “North-South” road construction
• Heydar Aliyev Center constuction
√ “Oguz-Qabala-Baku” water pipeline
• All above of them

280. Which one is NOT an investment portfolio of SOFAZ?

√ bitcoin
• gold
• All above of them
• real state
• bond

281. Fiscal policy can be described as:

• none of them
• means used to achieve full employment by changing taxes, and monetary growth targets
• changes in government expenditures or tax revenues that achieve economic goals
√ changes in government expenditures or taxes in order to achieve national economic goals
• means used to achieve full employment by changing taxes, and monetary growth targets

282. According to Keynes changes in the government’s purchases were probably the most effective tool for reducing or eliminating:

• budget deficits
• none of them
• inflatory gaps
√ output gaps
• employment

283. An increase in the government’s purchases eliminates a(n) gap.

• none of them
• inflation
√ contractionary
• poverty
• income

284. If the economy is in an inflationary period, what action would Fiscal Policy most likely take?

• Decrease taxes
√ Increase taxes
• Decrease the discount rate
• Increase spending
• Decrease spending
285. If GDP is raising and the unemployment rate is decreasing, what actions would Fiscal Policy take to try to fix this economic situation?

• Lover taxes
• Increase spending
• Raise taxes
√ Decrease spending
• None of them

286. If Fiscal Policy is trying to promote stability and economic growth through tax cuts, what type of policy is Fiscal policy using?

• Non of them
• Easy Money Policy
• Tight Money Policy
√ Expansionary Fiscal Policy
• Restrictive Fiscal Policy

287. If the Federal Reserve is trying to promote economic stability by lowering the Federal Funds rate, what action would Fiscal Policy take?

• Decreasing borrowing
• Decreasing spending
√ Lowering taxes
• Increasing taxes
• Increasing borrowing

288. Contra-cyclical fiscal policy was popularised by:

• J.B. Say
√ Keynes
• Dalton
• none of them
• Adam Smith

289. Deficit financing as a tool of fiscal policy was suggested by:

• Dalton
√ Keynes
• J.B. Say
• none of them
• Marshall

290. Keynes popularised:

• Income policy
√ Fiscal Policy
• none of them
• Price policy
• Monetary policy

291. The balanced budget principle was advocated by:

• Mercantilists
√ Classical school
• none of them
• Keynesians
• Neo-Classical school

292. How are Fiscal Policy and the Federal Reserve similar?

• They always must have Congressional approval before passing

√ They both try to promote economic stability
 • They both have a Board of Governors
• all of them
• They both use the same tools to fix economic problems

293. Fiscal policy refers to

• the behavior of the central bank, regarding the nation's money supply
√ the spending and taxing policies used by the government to influence the economy
• the techniques used by a firm to reduce its tax liability
• none of them
• the government's ability to regulate a firm's behavior in the financial markets

294. Fiscal policy can be defined as:

• government spending and tax decisions

√ use of the federal budget to reach macroeconomic objectives
• All of them
• government policy to retire federal debt
• government policy with respect to transfer payments

295. Author of ‘General Theory of Employment, Interest and Money’:

• Musgrave
√ Keynes
• Dalton
• none of them
• Marshall

296. Functional Finance concept was introduced by:

• Marx and Angels

√ Keynes and Lerner
• J.S. Mill
• none of them
• Dalton and Pigou

297. Pump Priming is related with:

• Income policy
√ Price policy
• Monetary policy
• none of them
• Fiscal policy

298. The finance commission is appointed every:

√ 5 years
• 1 years
• 3 years
• 7 years
• 10 years

299. Which of the following is not a fiscal instrument?

• Public expenditure
√ Open market operations
• Budget
• all of them
• Taxation
300. Which of the following is a measure of fiscal policy?

• C.R.R.
√ Public expenditure
• Bank rate
• tax debt
• S.L.R.

301. The First Finance Commission was appointed in the year:

• 1944
√ 1951
• 1978
• 1995
• 1965

302. Fiscal policy is the policy of:

• RBI
√ Government
• All of them
• none of them
• NABARD

303. The principle of judging fiscal measures by the way they work is called:

• Personal finance
• none of them
• Public finance
√ Local finance
• Functional finance

304. The neoKeynesian approach to public finance is called

• Personal finance
√ Federal Finance
• Public finance
• all of them
• Functional finance

“The best system of public finance is that which secures the maximum social advantage from the operations which it conducts” is the
305. dictum of

• J.B. Say
√ Adam Smith
• Marshall
• none of them
• Dalton

306. Which one is the internal cause of fiscal risks?

• Financial Crisis
√ Issuance of guarantee
• All of them
• World economy recession
• none of them

307. Which one is the exogenous cause of fiscal risks?

• None of them
 √ World Economy Recession
• Issuance of guarantee
• all of them
• Macro economy forecast

308. Resource-rich government response to positive temporary shock is

• All above of them

√ Save revenues
• none of them
• Increase consumption
• Borrowing

309. Resource-rich government response to the negative temporary shock is

• All above of them

√ borrowing
• Cut government services
• Save revenues
• Repay public debt

310. Resource-rich government response to the positive permanent shock is

• Draw down on savings

• Save revenues
• Cut government services
• All above of them
√ increase consumption

311. Resource-rich government response to the negative permanent shock is

• Lower taxes
√ Decrease consumption
• Borrowing
• Save revenues
• All of the above

312. Which one is a fiscal policy indicator?

• Interest rate
√ Overall fiscal balance
• Public debt
• Inflation
• All of the above

313. In the case of capital scarce economy, the priority of the resource-rich government is

• Promote macro-economy stability

√ Increase public investment
• All of them
• Increase borrowing
• Save revenues for the future generation

314. Which one is NOT a component of the Permanent Income Hypothesis (PIH) policy for the resource-rich government?

• None of them
√ Unemployment rate
• Non-oil revenues
• Interest rate
• Government expenditures
315. Which one is NOT dedicate the resource-rich government saving policy?

• Permanent Income Hypothesis

√ Budget classification
• none of them
• all of them
• Bird -In -Hand

316. Under which fiscal rules would the government SAVE the MOST amount of oil revenue in the first few years of production?

• Permanent income hypothesis rule

√ Bird-in-hand rule
• ‘Intermediate’ rule that allows for greater spending on public investment projects
• none of them
• ‘Spend all oil revenue’ rule

317. Natural resource revenues management Doesn’t raise the following questions;

• How much to save?

√ How manage the behavior of beneficiaries?
• Whether to use revenues, or raise public debt?
• How much to spend?
• How to invest resources for long term benefit?

318. Which one is Not a fiscal rule?

• Budget balance rules

√ Monetary rules
• Debt rules
• Revenues rules
• Expenditure rules

319. Oil-rich governments are often criticized for ‘pro-cyclical’ fiscal policy. What is ‘pro-cyclical fiscal policy’?

• Government spending oil money on wasteful projects like monuments

√ Government increasing spending when revenues are high and cutting spending drastically when revenues go down
• All of them
• The central bank printing money, causing inflation
Government stabilizing the economy by spending more when the economy is suffering and cutting spending when the economy is doing
• well

What type of risk should be cosidered in the following case: dollar payments are settled later than euro payments, which in turn are
settled later than yen payments. Thus, someone buying in dollars and paying in euros will have settled the euro side of the payment
320. before receiving any dollars. If the counterparty were to fail in the midst of this transaction, the transaction initiator would have paid
dollars but lost the offsetting euros ?

• liquidity risk
√ a settlement risk
• market risk
• reinvestment risk
• inflation risk

321. Which of the following is NOT one of the issued checks' routings?

• same bank settlement

√ a beneficiary settlement
• check - clearing institution
• electronic check presentment
• correspondent bank settlement
322. A net settlement system that is operated by the Clearing House in New York, which in turn is owned by a group of banks called

• Beneficiary system
√ the CHIPS
• Beneficiary's bank
• Federal Reserve system
• ACH

Which of the following systems is the net settlement system used for electronic payments in the United States, and is used by most
323. banks in the country?

• Federal Reserve system

√ the ACH
• CHIPS
• Beneficiary's bank
• Beneficiary system

324. Type of payment that does not require immediate execution and tends to be for smaller amounts is …

• check
√ a low - value payment
• mobile payment
• cash payment
• high - value payment

Type of payment that must be executed immediately, because of the time constraint, high - value payments cannot wait for end - of -
325. day netting called …

• low - value payment

√ the high - value payment
• check
• mobile payment
• cash payment

326. Which system is primarily designed to handle a certain type of transaction?

• gross basis
√ the clearing and settlement system
• net settlement
• net basis
• gross settlement

327. Payments can be on ... where each bank pays the total amount owed.

• gross settlement
√ a gross basis
• net basis
• net settlement system
• individual transaction

328. All of the following are hedges against exchange-rate risk Except?

• adjustment of funds commitments between countries.

• balancing monetary assets and liabilities.
• foreign-currency swaps
√ use of a spot market
• currency futures

329. Which of the following is related to European-style option?

 • can be exercised at any time prior to and including expiry date
√ only exercisable on the expiry date
• can be exercised at any time after and including expiry date
• restricts to exercise on expiry date
• is not beneficial

330. A call option…

• allows buyer to sell underlying currency at strike price.

√ permits the buyer to buy the
underlying currency at the strike price
• allows buyer to sell underlying currency at lower price.
• does not allow buyer to sell currency
• permits buyer to buy underlying currency at higher price

331. Which of these statements is false?

• Spot exchange rate is bad predictor of future exchange rate

• Forward exchange rate is unbiased predictor of future exchange rate
√ Spot exchange rate is a good predictor of the future exchange rate
• Forward exchange rate and future spot rate may not be same.
• Forward exchange rate is good predictor of future spot exchange rate.

332. The bid price is...

• price at which dealer will sell currency

√ price at which the dealer will purchase a currency
• currency that fluctuate in amount
• buyer can exercise it at current market price
• currency that does not fluctuate in amount

333. What is the current exchange rate between any two currencies?

• spot settlement
√ a spot rate
• cross rate
• quote rate
• point rate

Economists have found that government budget volatility (spending going up and down often) harms economic development. In what
334. way does budget volatility harm economic development?

• Local businesses cannot trade with businesses in other countries

√ It causes lower GDP growth and leads to poor government investment decisions
• none of them
• It causes the government to invest more in public services like health and education
• It causes wars, which hurt the economy.

335. The Fiscal Rules refer to

• Commitment to specified numerical targets for some key macroeconomic indicators

√ Commitment to specified numerical targets for some key budget aggregates
• non-oil revenue
• all of them
• Commitment to specified targets for the budget deficit

336. Which one is a fiscal rule?

• none of them
√ Expenditure rules
 • Monetary rules
• Social rules
• All of the above

337. What is a non-oil budget deficit?

• Total budget expenditures – oil budget incomes

√ Total budget expenditures – non-oil budget incomes
• none of them
• Total budget expenditures – extra-budget incomes
• All of the above

338. Revenue rule in the resource-rich budgeting is

• none of them
√ Floor, or ceiling on revenues, entering the budget
• All of them
• Floor on revenues, entering the budget
• Ceiling on revenues, entering the budget

339. Expenditure rule in the resource-rich budgeting is

• Limit on the total expenditures

√ All above of them
• Limit on recurrent expenditures
• Limit on expenditure on absolute term
• Not one of them

340. Debt rule in the resource-rich budgeting is

• All above of them

√ Limit on public debt as a percentage of GDP
• none of them
• Limit on public debt as a percentage of total revenues
• Limit on public debt adjusts the inflation rate

341. Modern Canons of taxation are propounded by:

• Seligmon
√ Adam Smith
• Pigou
• none of them
• Bastable

342. The public debt of a country is not necessarily a burden on the economy to the extent that:

• it is paid for by borrowing abroad

√ it grows less rapidly than GDP
• it can be financed without adding to inflationd) it can be financed without adding to inflation.
• none of them
• people are happy to hold government bonds

343. If the public debt can be financed without adding to inflation or causing interest rates to rise, it is said to be:

• in primary balance
√ sustainable
• only a burden on future generations
• Non of them
• following the golden rule of the public finances
344. The sale of government bonds overseas:

• causes a smaller increase in interest rates than the sale of bonds to the domestic banking sector
√ causes a smaller increase in interest rates than the sale of bonds to the domestic private sector
• causes a fall in the domestic money supply
• causes a deficit in the balance of payments
• none of them

345. Debt capital refers to:

• factoring accounts receivable

√ funds raised by borrowing that must be repaid.
• inventory loans.
• none of them
• money raised through the sale of shares

346. The most widely used source of short-term funding is:

• none of them
• factoring.
√ trade credit.
• family and friends.
• commercial banks

347. General risk assessment controls :

• define dealing responsibilities

• verify contract terms and signatory
√ determine the counterparty creditworthiness
• use standardized master agreements
• confirm all hedging transactions

A general rule for estimating the fair value of forward exchange rates
348. is …

• to be suffi cient to trigger income statement recognition.

• to consider time value of money if signifi cant in circumstances
• to use changes in future exchange rates
• to focus on relationships between forward contract and foreign currency denominated payable.
√ to use the changes in the forward exchange rates, and discount those estimated future cash flows to a present - value basis.

349. If the option is out of the money…

• buyer can exercise it at , using same expiry date and same currencies.
• buyer can exercise it at current market price
• buyer can exercise it at better price than current exchange rate.
√ buyer can exercise it only at an
exchange rate that is worse than the market rate.
• buyer can exercise it at future market price

350. Contractual controls are implemented to…

• audit spreadsheet calculations and contents

• include in hedging procedure requirement
• define dealing responsibilities
• determine counterparty creditworthiness
√ verify the contract terms and signatory

351. Which of the following is not related to foreign exchange hedging controls?
 • contracts
• risk assessment
• hedge accounting
√ the options
• hedging authorizations

352. What is the key feature of a currency option?

• It cannot be traded
• It does not give investors right
• It permits holder to determine exchange rate at which it is redeemed.
√ It provides the holder with an asymmetric hedge against currency movements
• It is lowest cost hedging instrument available

353. The currency swap is useful…

• when foreign currency cash flow is not delayed

√ when a company forecasts a short - term liquidity shortfall in a specific currency
for company to swap its
• other currency reserves into currency that must be bought
• for company to offset what is likely to be low interest rate on short - term debt with lower interest rate
when company forecasts long - term
• liquidity shortfall in specific currency

354. Which one of the following is definition of unilateral netting?

• When there are multiple parties wishing to net transactions, it becomes much too complex to manage with spreadsheet.
√ A company can aggregate the cash flows among its various subsidiaries, to determine if any foreign exchange payments between the
subsidiaries can be netted.
Common approach is to net transactions through centralized exchange, such as Arizona - based
• EuroNetting
• Exchange operator then pays or receives each participant ’s net position, and uses proceeds to offset required foreign exchange trades.
• They can track payables owed to each other and net out balances at end of each month, and one party pays other net remaining balance.

355. Choose the correct answer:

• Authorization to deal in foreign exchange hedging transactions shall be issued solely by treasury department
√ Authorization to deal in the foreign exchange hedging transactions shall be issued
solely by the board of directors.
• Determination of hedge effectiveness shall always use different method for similar types of hedges.
• Treasury staff should not conduct full - risk modeling of its foreign exchange positions
Foreign exchange risk management can be used to increase volatility of
• company ’s cash flows and earnings.

356. What management system focuses on the end products or results of organizations?

• Managing for results

√ The Total Quality Management
• Capital project summaries
• all of them
• Management by objectives

357. Strategic planning helps to?

• to assess whether program's purpose and design are clear and sound
√ assess whether the program has valid long-term and annual measures and target
• to rate program performance on measures and targets reviewed in strategic planning section and through other evaluations
• none of them
• implement high-value performance measures and rigorous measurement

358. Which is the description of credit?

 • Knowledge creation and its application
√ The goals served by providing loans, loan guarantees
• Formula used in awarding grants to state and local governments
• all of them
• Rulemaking and enforcement used to accomplish mission

359. Which is not the objectives of budget decision making process?

• Ensure lead role for strategic planning

√ The implemention of low-value performance measures and rigorous measurement
• Make performance information available to the public
• all of them
• Use results in decision making

360. How many levels are used for alternative fundings for each package?

• 4
√ 3
• 6
• none of them
• 5

361. What is another form of “what-if” budgeting?

• all of them
• Assumption-base budgeting
√ The Zero-base budgeting
• Performance budgeting
• Early use budgeting

362. What is the more specific determination of the manpower, material, and facilities necessary for accomplishing a program?

• Planning
√ The programming
• Confirmation
• none of them
• Budgeting

What is the production of the range of meaningful potentials for selection of courses of action through a systematic consideration of
363. alternatives?

• Programming
√ The planning
• Submission
• all of them
• Performance budgeting

364. Which is true?

• Holders of convertible bonds have "death spiral' nickname

√ Debenture is a bond with no collateral
• Deferred interest bond is bond issuance where portion of total number of bonds are paid off each year
• Serial bond is bond with no stated interest rate
• Floarless bond is bond that can be converted to stock

365. What is income bond?

• Is bond whose payments are guaranteed by another party

√ A bond that pays interest only if income has been earned
 • Uses as collateral company's security investment
• This bond issued with no collateral
• Which allows purchasers to convert them to common stock

366. Which is false?

• Bond agreement may contain requirements to create sinking fund to buy back all bonds or by bond for regular schedule
√ The convertible debt has not a feature allowing the holder to turn in the bond in exchange for the stock
• Company transfers funds to trustee who use it to buy additional bonds, since there is no one to whom interest can be paid
• Convertible debt involves specific conversion price per share
• Under market value method conversion price is based on number of shares issued, multipled by market price on conversion date

367. Which of the answers is about Zero coupon convertible bond?

• Pays interest only if income has been earned

√ No stated the interest rate
• Interest rate varies as percentage of baseline indicator, such as prime rate.
• Bond offering can be backed by any real estate, equipment or all assets owned by company
• Portion of total number of bonds are paid off each year, so amount of debt outstanding will decrease

368. Current Services Budgeting, Fixed-Ceiling Budgeting, Open-Ended Budgeting are called as?

• Leading
√ The Preparation assumptions
• Planning
• all of them
• Executing

369. What is the example of research and development?

• Department of Energy's Weatherization Assistance program

√ The Solar System Exploration program of National Aeronautics and Space Administration
• Navy Shipbuilding
• none of them
• Guarantees program

370. Services provided primarily by federal employees is which type of federal program?

• Regulatory based
√ The Direct federal
• Block grant
• all of them
• Formula grant

371. The umbrella term most often used to describe the overall field of program information is?

• Management accounting
√ A Performance measurement
• Capital commitments
• none of them
• Capital project codes

372. Indicate agency's mission, funding requirements, and changes requested is called as?

• Capital commitments
√ A Commissioner`s statement
• Program recapitulation
• all of them
• Capital project codes
373. Overview of MAX budget system, which provides computer support for the budget process, account identification codes is called as?

• Object classification
√ A Budget data system
• Character classification
• none of them
• Combined schedule

374. Which level of budget formulation consists of “preparation, submission, execution”?

• Local
√ Federal
• Regional
• none of them
• State

375. Which of the following is not one of the series of budget documents:

• Operating budget
√ A market budget
• capital budget
• all of them
• Special fund budgets

376. What Is a Budgeting System?

• system software that manages computer hardware, software resources, and provides common services
√ a designed to help you understand and evaluate your relationship with money.
• study of people, technology, organizations, and relationships among them.
• all of them
• automation and integration of public financial management processes

377. Which of the following is true for the decription of the subject of Information on Financial Management?

• Report information technology spending and efforts to expand public access to information through technology
√ The General reporting requirements, policies addressed by reports, description of required Report on Resources for Financial
Management Activities
• Estimate expenditures for construction, leases of capital assets, hospitals, advisory committees, taxes, and tax expenditures
• none of them
Estimate expenditures for employee pay and
• benefits

378. Which of the following includes the Guaranteed Loans

• Disaster Assistance
• all of them
• Federal Student Loans
√ The Commodity Credit Corporation
• Housing and Urban Development

379. When Nonexhaustive expenditures occur

• o recognize important differences in functions of government and industry

• none of them
• budgets decline, relative to total federal budget
√ the government redistributes or transfers resources to components of the society instead of consuming them
• drawing useful comparisons among international organizations is difficult

380. The major source of revenue for the federal government

 • Property tax
• Luxury tax
• all of them
• Excise tax
√ The Individual income tax

Balanced budget amendments ensure that states do not consider money from _________ in the creation of their budget and their
381. spending.

• Budget
• all of them
• Tax
√ The Loans
• Finance

382. What are the parts of Expenditure Budget?

• Operating and non-operating expenditures

• Fixed and irregular expenditures
• all of them
• Financial and extraordinary
√ A capital and revenue expenditures

383. Spending for federal programs that must receive annual authorization is called

• Busines spending
• Non-discretionary spending
√ A Discretionary spending
• Fixed expenses
• all of them

384. Which of the following is the procedure by which an organization or individual creates and manages a financial plan?

√ The Budget Process

• Formal Process
• all of them
• Research Process
• Manufacturing Process

385. A written acknowledgment that something of value has been transferred from one party to another is called

• Diversification
• none of them
• Management
√ A receipt
• Confirmation

386. All the money borrowed by the federal government over the years and still outstanding is called

√ The federal debt

• Mortgage
• none of them
• Mutual fund
• Home loan

387. A budget for expenditures on items that will serve for the long-term is __________

√ A Capital budget
• none of them
 • Cash budget
• Labor Budget

388. An excess of federal expenditures over federal revenues.

• Income tax
• none of them
√ The Deficit
• Budget
• Revenue

389. The government has a budget deficit if:

• its total revenues are greater than its total expenditures.

• its total revenues are equal to its total expenditures.
• all of them
• money supply is less than total expenditures.
√ its total revenues are less than its total expenditure.

Which investment strategy requires the treasurer to determine what cash is available for short, medium, and long - term investment, and
390. to then adopt different investment criteria for each of these investment tranches?

• laddering strategy
• earnings credit strategy
• matching strategy
√ a tranched cash fl ow strategy
• riding the yield curve

Which investment strategy should be implement for the following case: At the most minimal level of investment strategy, the treasurer
391. can do
nothing and leave idle balances in the corporate bank accounts ?

• riding the yield curve

• matching strategy
• laddering strategy
√ an earnings credit strategy
• tranched cash flow strategy

392. Choose incorrect type of investment option

• money market fund

• bankers ’acceptances
• certificate of deposit
√ the primary market transaction
• repurchase agreement

393. The final consideration when making an investment is its

• coupon rate
• marketability
• risk
√ a yield
• bond price

394. A company policy should limit investments to a specific set of

• maturities only
√ the low - risk investment types
• marketabilities only
• risk - free returns
 • good rate of returns

395. When considering various forms of cash investment, the treasurer should first consider …

• any portion
• high returns
• company funds
• risky investment
√ the safety of the principal being invested

Payment, where a large number of transactions are accumulated and offset against each other, with only the net differential being
396. transferred between banks.

• high - value payment

• gross basis payment
• gross settlement
√ a net basis payment
• net settlement

397. Who calculates net settlement claims between the originating and receiving financial institutions in its area?

√ an ACH operator
• depository financial institution
• originator
• ACH instructor
• receiver

398. What calculates the net position of all checks received, and sends net settlement information to the Federal Reserve Bank?

• payer's bank
• Federal Reserves bank
• benificary company
• beneficiary's bank
√ the ECH

399. … receives a check from the payer company, and sends the check to its bank

• payer's bank
• ECH
• beneficiary's bank
√ a benificary company
• Federal Reserves bank

400. To avoid this settlement risk while also speeding up the settlement process, a number of major banks banded together to create …

• Beneficiary system
• ACH
• Federal Reserve system
√ the CLS system
• CHIPS

401. What for the treasurer does not meet with the representatives of banks

• the bank ’ s fee structure

√ Credit granting to the customers
• hedges
• Cash pooling
• foreign exchange transaction

402. What for the treasurer does not meet with the representatives of banks
 • any debt granted to the company by the bank
√ borrowing base percentage
• foreign exchange transaction
• hedges
• the bank ’ s fee structure

403. What for the treasurer does not meet with the representatives of banks

• Hedges
√ Accounting reports
• Custodial services
• Cash pooling
• Wire transfers

404. What for the treasurer does not meet with the representatives of banks

• to discuss the company’s financial condition

√ account receivables
• cash pooling
• hedges
• custodial services

405. What for the treasurer does not meet with the representatives of banks

• Hedges
√ Taxation
• Custodial services
• Cash pooling
• Wire transfers

406. What for the treasurer does not meet with the representatives of banks

• to discuss the company’s financial condition

√ account payables
• any debt granted to the company by the bank
• foreign exchange transaction
• the bank`s fee structure

Why the treasury staff responds to information requests from the credit agency ’s review team and provides it with additional
407. information over time

• for working capital management

√ for credit rating agency relations
• for investment management
• for treasury risk management
• for management advice

Why treasury staff does need to know about probable terms that equity investors will want exchange for their investment in the
408. company

• for cash forecasting

√ for management advice
• for investment management
• for treasury risk management
• for working capital management

409. Why treasury staff does need to know about the availability of debt

• for working capital management

 √ for management advice
• for cash forecasting
• for treasury risk management
• for cash management

410. Why treasury staff does need to know about interest rates that the company is likely to pay on new debt offerings

• for cash forecasting

√ for management advice
• for cash management
• for treasury risk management
• for working capital management

411. Why does treasury staff need hedging activities

• for cash forecasting

√ for investment management
• for cash management
• for treasury risk management
• for working capital management

412. Why it is important to match the maturity dates of investments with a company ’ s projected cash needs:

• for working capital management

√ for investment management
• for cash management
• for treasury risk management
• for cash forecasting

For what the treasury staff uses the information it obtained from its cash forecasting and working capital management activities to
413. ensure that sufficient cash is available for operational needs:

• for cash forecasting

√ for cash management
• for investment management
• for treasury risk management
• for working capital management

What for the treasurer should be aware of working capital levels and trends, and advise management on the impact of proposed policy
414. changes on working capital levels:

• for cash forecasting

√ for working capital management
• for investment management
• for treasury risk management
• for cash management

415. Why does treasury staff need plan to use investment vehicles that are of the correct duration to match scheduled cash outflows:

• for working capital management

√ for cash forecasting
• for investment management
• for treasury risk management
• for cash management

416. Which activity is for the treasurer to maintain excellent relations with the investment community:

• cash forecasting
√ fund raising
• bank relationship
 • insurance
• credit granting

417. Which activity is allows the treasurer the amount of working capital locked up in accounts receivable

• cash forecasting
√ credit granting
• bank relationship
• insurance
• fund raising

418. Who are not the investment community buy side:

• investors
√ brokers
• other sources of cash who buys company`s debt and equity
• there is not any listed buy investment community buy side above
• pension funds

419. Who are the investment community sell side:

• non-investment bankers
√ brokers
• pension funds
• other sources of cash who buys company`s debt and equity
• investors

420. Choose the wrong answer:

• treasurer is responsible for insurance activity on behalf of the company

√ treasurer is responsible for the amortization and depreciation
• treasurer is responsible for the fund rising
• treasurer is responsible for the bank relationship
• treasurer is responsible for risk management activities

421. Choose the correct answer:

• treasurer does not have any relationship in companies merge and acquisition activities
√ treasury manager should be in acquisition integration experts team
• large companies does not need to have a core team of acquisition integration experts
• merge and acquisition does not require TMS integration at all
• treasury staff should not an expertise in integration TMS of acquires into the company

422. Treasurers advice management about:

• interest rates on new debt offerings

√ receivable collections
• market conditions
• terms that investors require for their investments in the company
• availability of debt

423. Treasury risk management activities does not include:

• company`s foreign exchange position

√ interest rates that company pays on its dividends
• hedging activities
• create risk management stra
• a monitoring of the interest rates and exchange rates

424. The treasury staff is responsible for the:

 • maximum return on investment
√ proper investment of excess funds
• putting funds under higher yield investments
• to match the starting dates of investments with a company ’ s projected cash needs
• putting funds under risky investments

425. Choose the wrong answer

• working capital is a key component of cash forecasting

√ working capital is an only key component of current liabilities
• working capital is a key component of current liabilities and current assets
• working capital is a key area for the managerial advice to the treasurer
• working capital is a key indicator of cash availability

426. Why does treasury staff need cash forecasting:

• to plan investment vehicles for subsidiaries

√ to plan funds acquisition
• to plan when cash is not needed
• to plan hedging operations for partners
• to handle receipts and disbursements

427. What is not under treasury department responsibility:

• bank relations
√ account receivables collection
• management advice
• fund raising
• working capital management

428. What is not under treasury department responsibility:

• cash forecasting
√ communication means
• investment management
• risk management
• cash management

429. What is not under treasury department responsibility:

• cash forecasting
√ tax reporting
• cash management
• investment management
• working capital management

430. The treasury department is responsible mainly for:

• company ’ future investments

• company ’ accounting
√ company ’ s liquidity
• company ’ reportings
• company ’ taxes

431. What are demerits of public debt?

• Puts burden on citizens

√ All of the above
• Adversely affects growth and development of country
 • Productive use of funds is not guaranteed
• Leads to tax increase

432. How to manage public debt?

√ The government should hand over the ‘sick units’ to private sector for development
• Discourage foreign investment
• Increase in government expenditure for its staff, in subsidies
• Government should not hand over ‘sick units’ to private sector
• All of them

433. How to manage public debt?

√ All of the above

• None of them
• Proper monitoring of public expenditure
• More disinvestment
• Consolidated sinking fund

434. How to manage public debt?

• All of them
• None of them
• Increase in primary deficit
• Increase in current expenditure
√ The foreign investors

435. How to manage public debt?

• Reduction in current expenditure

• None of them
• Foreign investors
√ All of the above
• Reduction in primary deficit

436. Which is not true?

• Alternative way to reduce primary deficit is to find ways to reduce loopholes

√ An alternative way to reduce the primary deficit is decreasing revenue
• Alternative way to reduce primary deficit is raising revenue
• None of them
• Important source of revenue can be charges for government services

437. Which is not true about issue of government bonds/other government securities?

• does not cause inflation

• People invest part of their savings in these securities
• Such investment does not generate excess demand
√ Creates an inflation
• it leads to accumulation of state securities in people

438. Which is true about issue of government bonds/other government securities?

√ All of the above

• Such investment does not generate excess demand
• People invest part of their savings in these securities
• it leads to accumulation of state securities in people
• does not cause inflation

439. Which is not the way to reduce budget deficit?

 • all of them
• to cut government outlays
• to increase tax revenues
√ to increase the interest rates on government debt
• to reduce interest rates on government debt

440. Which is not the way to reduce budget deficit?

• to reduce interest rates on government debt

• all of them
• to increase tax revenues
• to cut government outlays
√ to decrease the tax revenues

441. What are the ways to reduce budget deficit?

• to increase tax revenues

• to reduce interest rates on government debt
• none of them
√ All of the above
• to cut government outlays

442. What are demerits of public debt?

• doesn't put burden on citizens

• Leads to tax decrease
√ Results into the country’s borrowing more from IFIs
• Productive use of funds is guaranteed
• Affects growth and development of country positively

443. Which one of them is true about long-term debt?

• raised for development programs

• high interest rate
√ All of the above
• maturity period of 10 years and above
• funded debts generally incurred for long period of time

444. Which one of them is true about long-term debt?

• raised for to meet short-term needs of public authorities

• maturity period of 5 years and above
• low interest rate
√ funded debts generally incurred for a long period of time
• all of them

445. Which one of them is true about medium-term debt?

• maturity period one year up to 5 years

• none of them
• borrowed for development and non-development activities
√ All of the above
• borrowed for medium-term needs

446. What is a short-term debt?

• Includes T-Bills usually issued for period of 91 days

• Low interest rate
√ All of the above
 • Must be repaid within one year
• Unfunded debts generally incurred for short period

447. Which one of them is an external debt?

• Market loans
√ The loans from IFIs
• Bonds
• Special securities issued by Central Banks
• T-Bills

448. Which one of them is an external debt?

• Bilateral borrowings
√ All of the above
• Loans from World bank
• Loans from IMF
• Multilateral borrowings

449. Which one of them is an internal debt?

• Bilateral borrowings
√ The market loans
• Loans from World bank
• Loans from IMF
• Multilateral borrowings

450. Which one of them is an internal debt?

• Market loans
√ All of the above
• Bonds
• Special securities issued by Central Banks
• T-Bills

451. What are unfunded debts?

• Borrowed for medium-term needs, development and non-development activities

√ Debts that are incurred to meet the temporary needs of the government
• Loans from IFIs
• Special securities issued by Central Banks
• Debts that are incurred for long period of time

452. What are funded debts?

• Debts that are incurred to meet temporary needs of government

√ Debts paid after a long period of time with a fixed rate of interest
• State loans
• Budget loans from budgets of other levels of budgetary system
• Loans from foreign governments

453. Which one of them doesn't composite public debt?

• Loans from foreign governments, banks and IFIs

√ Inefficiency of the Government’s financial system
• loans and budget loans from budgets of other levels of budgetary system
• State guarantees of loan repayments of NGOs, provided by Government
• State loans implemented through issue of securities on behalf of Government

454. Which one of them composites public debt?

 • Corruption in public sector
√ Loans from the foreign governments, banks and IFIs
• Force-Majeure/Exceptional circumstances
• Reduction of Government revenues during economic crisis
• Inefficiency of Government’s financial system

455. Which one of them composites public debt?

• Loans from foreign governments, banks and IFIs

√ All of the above
• loans and budget loans from budgets of other levels of budgetary system
• state guarantees of loan repayments of NGOs, provided by Government
• State loans implemented through issue of securities on behalf of Government

456. Which one of them isn't a cause for a budget deficit?

• Growth of public expenditures

√ Proper monitoring of the public expenditure
• Force-Majeure/Exceptional circumstances
• Inefficiency of Government’s financial system
• Reduction of Government revenues

457. Which one of them is a cause for a budget deficit?

• Corruption in public sector

√ All of the above
• Force-Majeure/Exceptional circumstances
• Reduction of Government revenues during economic crisis
• Inefficiency of Government’s financial system

458. Which one of them is a cause for a budget deficit?

• Issue of government bonds

√ Reduction of Government revenues during the economic crisis
• Issuance of additional money
• Reducing current expenditure
• Issue of government securities

459. Which one of them is a cause for a budget deficit?

• Cutting government outlays

√ Inefficiency of the Government’s financial system
• Reducing interest rates on government debt
• Issuance of additional money
• Increasing tax revenues

460. What is public debt?

• Bilateral borrowings
√ Debt obligations of the state to individuals and legal entities, foreign states and international organizations
• Loans from IFIs
• Market loans
• Multilateral borrowings

461. Preferred share:

referred to as note payable in accounting, or commonly as just "note", is contract where one party (maker or issuer) makes unconditional
• promise in writing to pay sum of money to other
• is time deposit, financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
 √ represents some degree of ownership in a company but usually doesn't come with the same voting rights.
• issued security establishing its holder's right to receive from issuer of bond, within time period specified therein
• represent ownership in company and claim (dividends) on portion of profits.

462. Promissory note:

• issued security establishing its holder's right to receive from issuer of bond, within time period specified therein
• is time deposit, financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
• represent ownership in company and claim (dividends) on portion of profits.
• represents some degree of ownership in company but usually doesn't come with same voting rights.
√ referred to as a note payable in accounting, or commonly as just a "note", is a contract where one party (the maker or issuer) makes an
unconditional promise in writing to pay a sum of money to the other

463. Bond:

• represents some degree of ownership in company but usually doesn't come with same voting rights.
• represent ownership in company and claim (dividends) on portion of profits.
• is time deposit, financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
referred to as note payable in accounting, or commonly as just "note", is contract where one party (maker or issuer) makes unconditional
• promise in writing to pay sum of money to other
√ an issued security establishing its holder's right to receive from the issuer of the bond, within the time period specified therein

464. Composite value of traded stocks group of secondary market is classified as

• limited liability index

• primary index
• stock index
• None of them
√ the stock market index

465. A primary market is one in which

• money market dealers make their most important trades

• None of above
• newly printed money is transferred to banks.
• Central Banks conduct its monetary policy.
√ financial assets are traded for the first time.

466. The trading of stock that was previously issued takes place

• none of them
• usually with assistance of investment banker
• in primary marke
√ in the secondary market
• all of them

467. Certificate of deposit:

• represents some degree of ownership in company but usually doesn't come with same voting rights.
• represent ownership in company and claim (dividends) on portion of profits.
√ is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
• issued security establishing its holder's right to receive from issuer of bond, within time period specified therein
referred to as note payable in accounting, or commonly as just "note", is contract where one party (maker or issuer) makes unconditional
• promise in writing to pay sum of money to other

468. Which of them are financial instruments:

• futures
• stock
• bonds
 √ All of the above
• options

469. Features of primary markets are:

• In primary issue, securities are issued by company directly to investors.

• Primary market performs crucial function of facilitating capital formation in economy.
• Primary issues are used by companies for purpose of setting up new business or for expanding or modernizing existing business.
√ All of the above
• Company receives money and issues new security certificates to investors.

470. A securities market is used in an economy

• transfer real assets in financial assets

• determine prices which will balance demand and supply
• None of them
• to attract new capital
√ All of the above

471. Professional participants of a securities market:

• investment managers
• market makers
√ All of the above
• broker-dealers
• brokerages

Financial instruments provided for the short term include: 1.Commercial paper
472. 2.Treasury bills 3.Certificate of deposits
4.Promissory notes

• 1,3 and 4
• 1 and 2
• 2 and 3
√ All of the above
• 1,2 and 3

473. Money market securities have all the following characteristics except they are not

• short term
• None of above
• low risk
√ the money
• very liquid

474. Which were the new financial products during the crisis?

• Structured vehicle
• Mortgage Backed Securities
• Credit Default Swaps
√ All of the options are true
• Derivative

475. A long contract requires that the investor

• Sell securities in future

• None of them
• Close out his position in future
√ Buy securities in the future
• Hedge in future
476. Which of them is the financial document?

√ All of the above

• Balance sheet
• Income statement
• Cash-flow statements
• Statement of owner's equity

477. Which of them is the budget execution document?

• Aging reports
• Liabilites document
• ROI report
√ The financial verification
• Income statement

478. Which of them is the bufget execution document?

• Balance sheets
√ The financial plan
• Cash-flow statements
• Income statement
• Tax returns

479. Which of them is the stage of budget execution?

• Top stage
• Culminating stage
• Determination stage
√ The verificaiton stage
• Bottom stage

480. Which of them is the stage of budget execution?

• Deprivation stage
• qualification stage
• Designing stage
√ The authorization stage
• Countering stage

481. What are the types of financial management?

√ All of the above

• Working capital management
• Long-run focused
• Capital structure
• Capital budgeting

482. Which of the following is not the budget execution document?

• Financial verification
• Monthly Disbursement Program
√ The Petty cash book
• Physical Plan
• Financial Plan

483. Which of them is not the function of financial management?

• Estimation of capital requirements

 √ To protect the company from phsyical damage
• Disposal of surplus
• Financial controls
• Determination of capital composition

484. Which of them is not the objective of financial management?

• To ensure regular and adequate supply of funds to the concern

√ To invest in the money market
• To ensure optimum funds utilization. Once the funds are procured, they should be utilized in maximum possible way at least cost.
To plan a sound capital structure-There should be sound and fair composition of capital so that a balance is maintained between debt
• and equity capital.
To ensure adequate returns to shareholders which will depend upon the earning capacity, market price of share, expectations of the
• shareholders.

485. Which of them is not the stage of budget execution?

• authorization stage
√ The qualification stage
• verification stage
• Payment stage
• commitment stage

486. Financial markets and institutions:

• affect types of goods and services produced in an economy

√ All of the above
• affect profit of business
• none of them
• involve movement of huge quantities of money

487. Financial activities affect:

• personal wealth
√ All of the above
• economy's location in the business cycle
• none of them
• spending decisions by individuals and business firms

488. Financial assets______

• directly contribute to country's productive capacity

√ indirectly contribute to the country's productive capacity
• contribute to country's productive capacity both directly and indirectly
• do not contribute to the country's productive capacity either directly or indirectly
• are of no value to anyone

489. ____ is the result of expenses eclipsing revenues.

• Balanced budget
√ A budget deficit
• All answers are true
• None of the answers
• Budget surplus

490. As a result of supreme mortgage crisis:

• stock market increased

√ dollar apreciated against euro and pound
• pound appreciated against dollar
 • euro appreciated against dollar
• bond prices went down

491. ____ is when income exceeds expenditures.

• Balanced budget
√ A budget surplus
• All answers are true
• None of the answers
• Budget deficit

492. ____ is a situation in financial planning or the budgeting process where total expected revenues are equal to total planned spending.

• Budget surplus
√ A balanced budget
• All answers are true
• None of the answers
• Budget deficit

____ is used to set the government's spending priorities, such as Social Security, national defense, and education, among many items,
493. and to identify how it will pay for those priorities with tax revenues.

• Government spending
√ The federal budget
• Taxation
• All answers
• Tax base

____ is the difference between what the U.S. government takes in from taxes and other revenue streams in a fiscal year and the amount
494. of money that has been authorized to be spent during that year.

• Government spending
√ The federal budget deficit
• Taxation
• All answers
• Tax base

495. One of the following is not an advantage of fiscal consilidation policy in Eurozone Countires:

• Debt reduction and affordability improves

√ Provides banks with term funding & cash for collateral.
• Helps fund periphery. Euro viability improves
• None of the answers
• Reduces costs for problem countries

496. The government institution that has responsibility for the amount of money and creditsupplied in the economy as a whole is the:

• None of the answers

• Treasury Department
√ The Central Bank
• Bank of settlement
• Commercial Bank

497. Which of the following is different stages of the budget execution process?

• authorization stage
√ All of the above
• verification stage
• payment stage
• commitment stage
498. The zero-based budget is the best method of budgeting because:

• Zero-based budget allows less money for wants

√ The zero-based budget ensures that every dollar you make is assigned a specific purpose
• This type of budget is less complicated than other types of budgets
• None of the answers
• Sticking to a zero-based budget requires less discipline

499. The following are guidelines for budgeting with an irregular income except:

• Prioritize the list in order of importance.

√ Budgeting with an irregular income is no different than budgeting with a regular income.
• When your check comes in, spend your money all the way down the list
• None of the answers
• Make a list of all of your expenses for the month ahead.

500. A written budget, if followed, removes __ from your finances.

• Overspending
√ All of the above
• Management by crisis
• None of the answers
• Guilt

501. Which of the following statements is false?

• The cash flow statement is reflective of what has already taken place
√ A budget is meant to summarize the saving and spending that has taken place over the past year
• A cash flow statement summarizes all of the income and outgo (spending) over a certain time period.
• None of the answers
• A budget is a written plan for saving and spending.

502. ____ is the process of monitoring, adjusting, and reporting on the current year's budget.

• Revenue
√ The budget execution
• Taxation
• All answers
• Expenses

A consumer is at the store and purchases a new vacuum cleaner. At checkout, that consumer will have to pay an additional tax on that
503. purchase; a sales tax. What type of tax is a sales tax?

• none of them
• Keynesian Tax
√ Proportional tax
• Progress tax
• Personal Income tax

504. If the economy is in a recession, the Fed could do all of the following EXCEPT

• Buy securities
• Lower the Federal Funds rate
√ Lower taxes
• Lower the Discount rate
• none of them

505. Incidence of tax means:

 • none of them
• actual tax burde
• none of these
√ indirect money burden
• Direct money burden

506. Which is the tax shifting?

• To bear the tax burden himself

• none of these
• none of them
• to bear some part of the tax himself and shift the rest on others
√ to shift the tax burden on others

507. The equity principle of taxation was propounded by:

• Marshall
• J.B. Say
• Dalton
√ Adam Smith
• none of them

508. “The government which taxes the least is the best”, is the belief of:

• Physiocrates
• Mercantilists
• none of them
• Modern
√ Classical

509. According to Laffer, when the tax rate is 100 per cent, the tax revenue will be:

• none of them
• 0.10
• 1
√ Zero
• 0.50

510. Incidence of a tax refers to the burden of tax:

• none of them
• Initial
• None
√ Ultimate
• Intermediate

511. In the case of regressive tax, the rate of tax as income increases:

• None
• none of them
• increases
√ Decreases
• remains constant

512. Advolorum duties are levied on:

• none of them
• Utilities
• Length
√ Value
 • Weight

513. Tax avoidance is:

• none of them
• Punishable
√ Legitimate
• None
• Illegitimate

514. The VAT was first introduced in:

√ France
• India
• none of them
• USA
• Britain

515. Customs duties are imposed on commodities as they cross:

• none of them
• Muncipal boundaries
• State boundaries
• District boundaries
√ National boundaries

516. Which one of the following is not a tax base?

• none of them
• Consumption
• wealth
√ Utility
• Income

517. Equals treated equally in taxation leads to:

• none of them
• Real equity
• None
• Vertical equity
√ Horizontal equity

518. The largest component of revenue expenditure in India is:

• none of them
• Pension
• Education
√ Interest payments
• Health

519. Agricultural Holding Tax was recommended by:

• Chelliah
• Adam Smith
• Marshall
√ K.N. Raj
• none of them

520. A tax that can be shifted is called:

 • None
• none of them
• Direct tax
√ Indirect tax
• Progressive tax

521. In India, personal income tax is levied on individuals by:

• State Government
√ Central Government
• Local bodies
• none of them
• None of these

522. Sound tax policy is devised mainly on the basis of:

• High price elasticity

√ Maximum tax revenue
• High income elasticity
• none of them
• Elastic tax base

523. In the case of direct tax, impact and incidence are on

• None of these
√ Same person
• Sellers
• none of them
• Different person

524. The direct violation of Tax law is called:

• Tax avoidance
√ Tax evasion
• None of these
• all of them
• Tax Rebate

525. The final resting place of the burden of tax is called:

• Tax avoidance
√ Incidence
• Tax evasion
• all of them
• Impact

526. When individuals with unequal tax paying ability should be taxed unequally in order to equal sacrifice is called:

• None of these
√ Vertical Equity
• Tax paying ability
• all of them
• Horizontal equity

527. Elastic revenue response to marginal tax rate reductions is called:

• None of these
• Marginal tax curve
• Functional curve
√ Laffer curve
 • all of them

528. State any two sources of Non-tax revenue receipts

• Not one of them

√ Interest, External grants
• Profits
• all of them
• Dividends

529. What is a tax?

• Compulsory unilateral payment to the government

√ Compulsory legal & unilateral payment to the government
• Compulsory legal payment to the government
• all of them
• Voluntary legal & unilateral payment to the government

530. How to define a direct tax?

• A tax, where burden can be shifted to others

√ A tax, where burden cannot be shifted to others
• A tax, where burden is flexible to manage
• all of them
• A tax, where burden is multilevel

531. How to define an indirect tax?

• A tax, where burden is multilevel

√ A tax, where payer pass it to customers on whom therefore its burden falls
• A tax, where burden cannot be shifted to others
• all of them
• A tax, where burden is flexible to manage

532. Which one is a direct tax?

• VAT
√ income tax
• excise
• all of them
• service tax

533. Which one is an indirect tax

• gift tax
√ excise
• income tax
• all of them
• wealth tax

534. Matching grant results in

• substitution effect
√ both income and substitution effects
• supplementary support from the extra sources
• all of them
• income effects

535. Nonmatching grants result in

 • supplementary support from the extra sources
√ income effects
• substitution effect
• all of them
• both income and substitution effects

536. Which one is NOT a tax base category?

• income
√ production
• consumption
• all of them
• wealth

537. Average tax rate is

• value of tax base/total taxes paid

√ total taxes paid/value of tax base
• total incomes/total taxes paid
• none of them
• total taxes paid/total incomes

538. Which one is NOT a principle of taxation?

• Ability to pay
√ Effectiveness
• Vertical equity
• none of them
• Horizontal equity

539. Which one is NOT a type of vertical equity in taxation?

• Progressiv
√ Neutral
• Regressive
• none of them
• Proportional

540. Taxable income is

• The amount of profits left after subtracting exemptions and deductions from adjusted gross income
√ The amount of income left after subtracting exemptions and deductions from adjusted gross income
• The adjusted gross income left after subtracting exemptions and deductions from total income
• none of them
• The amount of taxes left after subtracting exemptions and deductions from adjusted gross income

541. Advantage of direct taxation is

• Inconvenient
√ Controls inflation
• Tax evasion
• none of them
• Arbitrary rate of taxation

542. Disadvantage of direct taxation is

• Lower cost mechanism

√ Tax evasion
• Certainty of tax to be paid
• none of them
 • Social and economic equity

543. Lorenz Curve shows

• Tax efficiency
√ Income distribution
• Effective tax rate
• none of them
• Tax collection

544. Tax expenditure constitutes

• Aftermath of the revenue

• Parallel to the revenue
• none of them
• Neutral revenue
√ Foregone revenue

545. Excise tax

• Increase the supply and decreases the prices

• none of them
• Indifferent to supply
√ Decreases the supply and increases the prices
• Indifferent to prices

546. A structural budget deficit is one that:

• arises because of high capital expenditure such as the building of new schools and hospitals
• arises because of accounting practice but has no economic significance
• occurs when countries are in recession
√ occurs regularly irrespective of the state of the economy
• All of them

547. What is budgeting?

• Having money left over at the end of the month

• Non of them
√ A plan made in advance regarding the expenditure of money based on available income
• Having enough money to go out to eat
• The ability to pay your bills on time

548. The best way to start the budgeting process is to:

• Automatically deposit money into a savings account with each paycheck

• Curbing your spending on incidental items such as dining out or entertainment
• Non of them
√ Start tracking all of the money you spend for a period of time, usually a month, so that you have an understand of where your money
goes
• Pay your credit card balance(s) in full each month

549. In regards to personal finances, "zero-based budgeting" is:

√ The practice of budgeting every dollar of income received

• Stopping all spending on incidentals such as dining out or entertainment
• Non of them
• The ability to pay all of your bills each month with something left for 'whatever'
• A budgeting method where you put 'zero' dollars on your credit card

550. The scope of public finance includes:

 • Public expenditure
• Public debt
• all of them
√ All of these
• Public revenue

551. Which is the main point on the basis of which public finance can be separated from private finance:

• Borrowings
• all of them
• Elasticity in income
• Price policy
√ Secrecy

552. Non-exclusion principle is related to:

• Mixed goods
• Merit goods
• Private goods
√ Public goods
• all of them

553. Education is an example of:

• Social good
• all of them
• Public good
• Club good
√ Merit good

554. With an 'envelope' budgeting system:

• You stop spending for particular categories of spending once the designated envelope is empty
• For each spending category, your spend only out of the designated envelope
• The cash for each month's expenses is taken out and divided into envelopes for each budget category
• Non of them
√ All of the above

555. Which of the following are the best tools for budgeting?

• Personal financial management software

• Computer spreadsheets
• Non of them
• A pencil and paper
√ Any of above. Whatever works best for you

556. When putting together a budget, which of the following items should you include?

• Non of them
• Fixed Expenses
• Savings
√ All of the above
• Discretionary Expenses

557. What is the most likely reason for a budget to fail?

• All of them
• Not making enough money
• Not using a personal financial planning website or software
 √ Failing to establish an emergency fund to account for unforeseen expenses
• Buying a pair of shoes, you just couldn't resist

558. Which of the following is not a function of budgeting?

• Planning
• All of them
• Motivating
√ Decision making
• Controlling

If a nation currently has a budget deficit, their income is not covering the cost of running their country. If this budget is not revised,
559. what could be a possible result of this situation?

• A budget surplus
√ A mounting debt
• Non of them
• A balanced budget
• Discretionary fiscal policy

560. Who is the father of Public Finance:

• Smith
• all of them
• Pigou
• Musgrave
√ Dalton

561. A budget where there is excess of expenditure over revenue is called:

• Balanced
• Zero-based
• all of them
√ Deficit
• Surplus

562. Which one of the following is not a public utility?

• Electricity
• all of them
• Gas service
√ Tourism
• Water supply

563. The Classical economists asserted that public expenditure is:

• Productive
• All of these
• stagnant
√ Unproductive
• all of them

564. Wagner’s Law is related to:

• Public revenue
• Budget
• Public debt
√ Public expenditure
• all of them
565. Adolph Wagner was a Economist:

• American
• French
√ German
• all of them
• Indian

566. The Zero-based budgeting was first adopted in:

• France
• India
• all of them
√ USA
• Germany

567. Who proposed the Zero-based budgeting for the first time:

• David Ricardo
• Alfred Marshall
√ Peter Phyrr
• all of them
• Adam Smith

568. Gender budgeting started in India with the Union budget of:

• 2001-02
• 1991-92
• 2010-11
√ 2006-07
• all of them

569. If you are a classical economist, which statement would you support?

• The more the government spends to improve the economy, the better
• The government is the key to economic success
• all of them
√ Let the economy work out its own problems
• The government should be involved to help during recessions

570. The most common cause(s) of financial problems are:

√ all of the above.

• credit terms
• undercapitalization
• all of them
• inadequate expense control

571. The steps in financial planning are:

• none of the above

• forecasting financial needs and developing budgets to meet those needs.
• identifying sources of financing.
√ 2&4.
• establishing financial controls to ensure the company is following the financial plans

572. Which forecast gives management some sense of the profit potential possible of different strategic plans?

• none of the above

• short-term forecast.
 • cash flow forecast
• none of the above.
√ long-term forecast.

A statement that projects management's expectations for revenues and, based on those financial expectations, allocates the use of
573. specific resources throughout the firm is called:

• a cash flow
• none of the above
• a resource allocation
√ a budget.
• a resource plan

574. A(n) budget is the plan of the various costs and expenses needed to operate the business, based on the short-term forecast.

• capital budget
• cash budget
• resource budget
√ operating budget
• none of the above

575. The Theory of Maximum Social Advantage was given by:

• Mill
• Marshal
• Musgrave
• none of the above
√ Dalton

576. A loan backed by collateral is called a:

• trade credit
√ secured loan.
• dividend.
• none of them
• line of credit.

577. Which of the following is a short-term source of funds

• 1&2
√ factor accounts receivable.
• issue common stock
• none of them
• issue corporate bonds.

578. A short-term corporate equivalent of an IOU that is sold in the market place by a firm is called:

• none of them
• mortgage.
√ commercial paper.
• sinking bond.
• convertible bond.

579. A bond backed by the company's real assets is called a:

• preferred bond.
√ first mortgage bond.
• convertible bond.
• none of them
• unsecured bond.
580. A firm's profit that is distributed to shareholders is called:

• discounts.
√ dividends.
• stock certificate.
• none of them
• interest.

581. Which one of the following is not a method for redeeming public debt?

• Sinking fund
√ Grants in aid
• Terminal annuities
• none of them
• Capital levy

582. Formation of is the actual method of debt redemption:

• Capital levy
√ Sinking fund
• Repudiation
• none of them
• Conversion

583. Redemption of public debt means:

• Deficit financing
√ Repayment of debt
• Additional borrowing
• none of them
• Repayment of FDI

584. The burden of long-term public debt falls on:

• All
√ Future generation
• Past generation
• none of them
• Present generation

585. The debts which the government promises to pay off at a specified date are called

• Funded debts
√ Redeemable debts
• Unfunded debts
• none of them
• Irredeemable debts

586. Short-period debts are called as:

• Redeemable debts
√ Unfunded debts
• None
• none of them
• Funded debts

587. Unfunded debts are also known as

• Irredeemable debts
 √ Floating debts
• None
• none of them
• Funded debts

588. Treasury bills issued by the Government are in the nature of:

• Irredeemable debts
√ Floating debts
• None
• none of them
• Funded debts

589. The fiscal deficit excluding the interest liabilities for a year is called as

• Budget deficit
√ Primary deficit
• Capital deficit
• none of them
• Revenue deficit

590. The term 'budgetary period' relates to:

• Non of them
√ The period for which the budget is prepared
• A specific year for which the budget has been prepared
• The period in which the budget is finalized
• The subdivisions of the main budget

591. Program-level expenditure indicates

• a set of social targets to be achieved

√ a set of specific policy objectives to be achieved
• a set of institutional frame to be achieved
• all of the above
• a set of organizational frame to be achieved

592. The Budget cycle is

• Enactment-Auditing- Formulation-Execution
√ Formulation- Enactment- Execution- Auditing
• Auditing- Execution- Enactment-Formulation
• all of the above
• Enactment- Formulation-Auditing -Execution

593. Formulation of the budget is

• Budget expenditure assessed for effectiveness

√ The budget is drafted and decisions are made about expenditures priorities
• Activities related to the budget are carried out
• all of the above
• Formal approval of the budget by the Parliament

594. The compliance audit of the budget is

• Assessing public entities strategic goals to be achieved

√ Assessing of the public entities compliance with the governing authorities
• Assessing of the public entities achieving efficiency and effectiveness in the employment of available resources
• all of the above
• Assessing the reliability and accuracy of the public entities financial reporting
595. The performance audit of the budget is

• Assessing public entities strategic goals to be achieved

√ Assessing of the public entities achieving efficiency and effectiveness in the employment of available resources
• Assessing of the public entities compliance with the governing authorities
• all of the above
• Assessing the reliability and accuracy of the public entities financial reporting

596. Which one is NOT a budget classification

• Administrative classification
√ Social classification
• Economic classification
• none of the above.
• Functional classification

597. Government expenditure according to its various activities and policy objectives in different sectors is a (an

• Administrative classification
• Economic classification
• none of the above.
• Functional classification
√ Program level classification

598. The classification system, which requires government entity responsibility is

• Functional classification
√ Administrative classification
• Economic classification
• none of the above.
• Program level classification

599. Which one contributes to assess and predict the optimal proportion between capital and recurrent expenditures?

• Administrative classification
• none of the above.
• Functional classification
√ Economic classification
• Program-level classification

600. Why budget classification requires “expenditures” approach, rather “expenses”?

• Because of asset value approach

√ Because of accrual basis approach
• Because of cash method approach
• none of the above.
• Because of capital expenditures approach

601. The main future of budget classification is

• none of the above.

• The principles of fairness
√ The principle of comprehensiveness
• The principle of coordination
• The principle of effectiveness

602. The medium term expenditure framework (MTEF) is an

• none of the above.

 • Estimates of revenues and expenditures taking into account business cycle
• Estimates of revenues and expenditures relatively GDP growth
√ Estimates of revenues and expenditures for multi-year periods
• Estimates of revenues and expenditures for the next year

603. The medium term expenditure framework (MTEF) is necessary, because of

√ Stimulating more efficient use of resources

• none of the above.
• Rapid economy growth
• More transparency
• More accountability

604. Which one is NOT a component of MTEF?

• 3-year budgetary expenditures in line with the government-approved framework and cost ceilings
• Preparation of a 3-year budget estimates for compromise programs
• none of the above.
√ Institutional framework
• Macroeconomic framework - analysis of sources

605. An administrative budget classification provides

• none of the above.

• Economic meaning of the budget
√ Day-to-day administration of the budget
• Sectoral information of the budget
• Policy aspect of the budget

606. Which of the following is an example of a 'fixed expense'?

• Gas for your car

• none of the above.
• Charitable contributions
• Non of them
√ Mortgage or rent payments

607. Salaries and pensions paid by governments are called:

• none of the above.

• Development expenditure
• Plan expenditure
• Capital expenditure
√ Revenue expenditure

608. Which public services are most likely to be efficiently provided by central government?

√ defense
• social insurance
• none of the above.
• public health
• education

609. Which public services are most likely to be efficiently provided by subnational government?

• social insurance
√ education
• public health
• defense
• none of the above.
610. Which one is NOT a mandatory spending in US?

• none of the above.

• Social security
• Medicare
√ Defense
• Net interest

611. Which one is NOT a non-defense discretionary spending in US?

• Diplomacy and international affairs

• none of the above.
• Education and training
√ Unemployment
• Science, environment and energy

612. Which one is NOT a protected expense item in the budget of Azerbaijan?

• Expenditures of foreign government liabilities

• none of the above.
√ Subsidies
• Salary
• Pensions

613. Which one is NOT a social spending?

√ R&D
• Culture
• Social protection
• none of the above.
• Education

614. The permanent cancellation of budgetary resources by a uniform percentage is a

• Public hearing
√ Budget sequestration
• MTEF
• none of the above.
• Default

615. Public Authorities Include:

• State Government
√ All of these
• Central Government
• all of them
• Local Government

616. Grants recommended by the Finance Commission are known as:

• Conditional grants
√ Statutory grants
• Conditional Grants
• all of them
• Plan grants

617. Which is the method of financial adjustment between Centre and States?

• Federal Finance
 √ Tax sharing
• Public debt
• all of them
• Grantinaid

618. Inter budgetary transfer is

• A transfer from one level of the government to lower levels

√ A transfer from one country budget to another one
• A transfer from extra budgetary fund to the state budget
• all of them
• A transfer from state budget to the extra budgetary fund

619. The grant is

• Cash, good, or services for which repayment is required by the government

√ Cash, good, or services for which no repayment is required by the government
• An asset
• all of them
• A tax

620. The main rational for the subsidy is

• To motivate business
√ To stimulate the investment
• To support budget
• all of them
• To discourage the investment

621. Which one is NOT a type of subsidy?

• Production subsidies
√ Entertainment subsidies
• Export subsidies
• all of them
• Oil subsidies

622. Contingent liability is

• An obligation, which has been entered into and not depends on the occurrence
√ An obligation, which has been entered into, but the timing and amount of which are contingent
• An obligation, which has never been entered into
• all of them
• An obligation, which has been entered into, but the decision is up to the government

623. Which one is NOT an example of contingent liability?

• Change of foreign exchange

√ Export stimulus
• Bank guarantee
• all of them
• Product warranty

624. What is NOT a quasi-fiscal activity?

• Activities of the public institutes, which are not fiscal in character

√ Activities of the central banks, SOE’s, which are fiscal in character
• Activities of the central banks in the foreign exchange markets
• all of them
• Activities of the public institutes, which stimulate private sector
625. Which one is NOT an example of a quasi-fiscal activity?

• Building infrastructures
√ Bank guarantee
• Payment of government debt
• all of them
• Interest rate subsidies

626. What is discretionary income?

• The amount of money you have remaining to put in a savings account at the end of the month
√ It is the income that remains after taxes and fixed expenses (such as rent or mortgage, utilities, insurance) are paid
• Non of them
• Commissions or bonuses paid by your employer, or tips received for services provided
• The money used to make your rent or mortgage payment, or other such expenses

627. In the following which is the characteristic of a tax

• optional
• forced
• none of them
• nationality
√ Compulsory

628. Which is the main objective of a tax:

√ Raising public revenue

• increase in production
• Increase in consumption
• none of them
• reduction in capital formation

629. Among the following canons of taxation which one has been given by Adam Smith:

√ canon of equity
• none of them
• Canon of Uniformity
• canon of diversity
• Canon of productivity

630. The Indian tax system is:

√ Regressive
• Degressive
• Progressive
• none of them
• Proportional

631. The burden of direct taxes is borne by:

• none of these
• poor person
√ on whom it is levied
• Rich person
• none of them

632. Direct taxes have the element of:

√ progressive
 • none of them
• convenient
• economy
• Evasion

633. In proportional tax system, the rates of tax remain:

• decreasing
√ Constant
• increasing
• none of them
• zero

634. Expenditure Tax for India was recommended by:

• Colin Clarke
• Adam Smith
• Adolph Wagnor
• none of them
√ Kaldor

635. Corporate Income tax is the tax levied on:

• Municipalities
• Corporations
• none of them
• Co –operative societies
√ Companies

636. Which of the following is the major source of revenue in India:

• Capital Levy
√ Indirect tax
• Grants in aid
• Direct tax
• none of them

637. Which of the following is not a Commodity Tax:

• Excise duty
• Octroi
• Customs Duty
√ Coporation Tax
• none of them

638. A duty levied on goods when they entering a town

• Agricultural tax
• Income tax
• none of them
√ Octroi
• Professional tax

639. Special Assessment means:

• Gift tax
• none of them
√ A tax on special benefits
• General tax on all people
• A periodical tax
640. Indirect taxes have an element of:

• certainity
√ Equitable
• encourage honesty
• none of them
• economical

641. Which of them is a financing method of budget deficit?

• Issue of money
√ All of the above
• Loans from public and firms of country
• Loans from other countries
• None of them

642. How to cope with budget deficit?

• None of them
• To finance budget deficit
• To find additional sources of income
• To reduce budget expenditures
√ All of the above

643. Having the central bank answerable to the treasury leads to:

• high level of economic relations

• economic growth
√ the missteps as monetizing the deficit
• sound and stable economy
• All answers are true

644. Internal Revenue Service in the U.S. is responsible for:

• Providing public loans

• None of the answers
√ Enforcing the tax law within treasury
• All answers
• Serving as unployment center

645. Central Banks:

• issue currency and set interest rates on loans and bonds

• control and manipulate the national money supply
• lower interest rates to spur growth, industrial activity, and consumer spending
• raise interest rates to slow growth and avoid inflation
√ All of the answers are true

646. To increase the amount of money in circulation and decrease the interest rate (cost) for borrowing, the central bank can buy:

√ All of the answers are true

• Central Bank has no buying power
• government-issued notes
• government bonds
• government bills

647. ___ acts as an emergency lender to distressed commercial banks and other institutions, and sometimes even a government.

• Commercial Banks
 • All answers are true
• Government
• Ministry of Finance
√ A Central Bank

648. Which of these is not a function of central bank?

• Custodian of foreign exchange reserves

• Currency authority
√ Accepting the deposits of general public
• Banker's bank
• None of the answers

649. The Function of The Central Bank that control the money supply is

• Lender of last resort

• Control of issue of currency
• None of the answers
• Banker's bank
√ The advisor to the government

650. The Function of the Central bank that helps the government to get a loan is

• government's bank
• All answers are true
√ managing the government borrowing
• banker's bank
• advisor to government

651. What does central bank control by Open market operations?

• Prices
• Money supply
• None of the answers
√ All of the answers are true
• Inflation

652. The central bank performs ___ that either inject the market with liquidity or absorb extra funds, directly affecting the level of inflation.

• Increasing income inequality

• All answers are true
• Rising poverty discrimination
√ The open market transactions
• Stimulating corruption

___ is a financial institution that is responsible for overseeing the monetary system and policy of a nation or group of nations, regulating
653. its money supply, and setting interest rates.

• All answers are true

• Ministry of Finance
• Government
√ A Central Bank
• Commercial Banks

654. In some countries, including the U.S., ___ is a key way to manage the amount of money outstanding.

• Rising poverty discrimination

• All answers are true
• Stimulating corruption
• Increasing income inequality
 √ Buying and selling debt issued by the treasury

655. It is considered very poor policy ___

• All answers are true

• address economic weakness through economic stimulus
√ to have the central bank answerable to the treasury
• take actions both at micro and macro level
• manage the country's currency

656. Roles of central bank includes all of the following except:

• acting as prudential regulator of the commercial banks and other financial institutions
• being cashier, processor of payments, and lender of last resort
• being manager or regulator of the payment and settlement systems
√ to provide loans to the public
• being overseer of the interbank and money markets

657. Overdraft is:

• contract outlining the terms under which one party agrees to rent an asset
• All answers are true
• money value of a property or of an interest in a property in excess of claims
√ an extension of credit from the financial institution that is granted when an account reaches zero
• putting capital to use today in order to increase its value over time

658. Which of these is not a function of central bank?

• Currency authority
• Custodian of foreign exchange reserves
• Banker's bank
√ Accepting the deposits of general public
• None of the answers

Working more directly from the liability side of the balance sheet, the CB can allow overdrafts in the Treasury account. Such an
659. overdraft becomes:

• Deferred tax liability

• None of the answers
• All answers
√ A new loan to the Treasury
• Investment property

660. Which of the following is one of different ways in which the Central Bank can credit Treasury balances directly:

• None of the answers

• All answers
√ The CB can purchase T-bills and bonds directly from Treasury when first issued
CB uses the option of applying makes banks and investment dealers to sell newly auctioned debt securities in exchange for the
• undertaking of required financing.
• Working indirectly and the asset side of the balance sheet, CB can allow overdrafts in the Treasury account.

661. Which of the following is an example for the partnership of Central Bank and Treasury at micro level?

• None of the answers

• Addressing economic weakness through economic stimulus
successful conduct and improvement of local government through supervision and direction of activities of the political sub-divisions of
• central government
√ By saving failing corporations to blunt the impact their financial troubles would have on the economy
implementing the state's diplomatic principles and policies and related laws and regulations; safeguard national sovereignty, security and
• interests
662. Which of the following is an example for the partnership of Central Bank and Treasury at macro level?

• None of the answers

implementing the state's diplomatic principles and policies and related laws and regulations; safeguard national sovereignty, security and
• interests
√ By addressing economic weakness through economic stimulus
successful conduct and improvement of local government through supervision and direction of activities of the political sub-divisions of
• central government
• Saving failing corporations to blunt the impact their financial troubles would have on the economy

When a decision is made to issue tax rebates, who is responsible for taking money out of the Central Bank and putting it into the hands
663. of consumers?

• Ministry of Taxes
• Ministry of Finance
• Tax Authorities
• Tax Services
√ The Treasury

664. __ also serves as the government's bank and generates a portion of the revenue used to fund the country's activities.

√ The Treasury
• None of the answers
• Commercial banks
• Customs Authorities
• Tax Authorities

665. The Treasury and the Central Bank work together in an effort to:

• contribute to rising inflation

• disbalance path towards normalisation
• None of the answers
• build-up of financial vulnerabilities
√ to maintain stable economy

Choose the direct ways that Central Bank can provide financing to the Treasury account:
666. 1. direct acquisition of government debt 2. deposit accounting overdraft 3. converting outstanding conventional debt to reserves 4. debit
to the equity capital account

• 1,2,3
• All answers are true
• 1,3,4
• 2,3,4
√ 1,2,4

667. Which of the following actions Treasury carry out?

• Monitor cash balances

• Maintain a cash buffer to handle volatility and unanticipated outflows
• Release cash to spending ministries, departments, and agencies
• Manage all government payments centrally
√ All of the answers are true

668. The Treasury's main role includes:

• Create stable patterns of interactions

• Provide social norms and social roles
• Ensure compliance with tax laws
• Prepare local regulations
√ The Government payment office
669. The Central Bank and the Treasury work together to:

• Accepting deposits of general banking

• None of the answers
• Expansion of credit
√ To borrow money when the government needs to raise cash
• Paying interest on deposits accepted from general public

Which organization issues Treasury securities and conducts Treasury securities auctions and sells these securities on behalf of the
670. Treasury?

• Customs authority
• Municipalities
• Tax authority
√ The Central Bank
• Social funds

671. Which of the following is an example for services of Central Bank?

• accepting electronic payments for social security taxes

√ All of the answers are true
• clearing checks for tax payments
• clearing checks for government receivables
• issuing payroll checks to government employees

672. Which of them is an advantage of taking loans from other countries?

• It is fairly expeditious
• Small GDP growth
• Investment stimulation
√ The ability of getting large amounts
• It is quick

673. Which of them leads to increase of external debt?

• All of them
• None of them
• Loans from public and firms of country
• Issue of money
√ The loans from other countries

674. Which of them leads to increase of domestic debt?

• Loans from foreign financial instutions

• Loans from other countries
• Issue of money
• Loans from other countries
√ Loans from the public and firms of the country

Which of them are true about loans from the public and firms of the country? 1. It leads to inflation 2. It may create a financial
675. deficit 3. Increases fund intended for investment 4. Provokes a greater deficit in the future 5.
Increases the amount of government bonds in the market

• 1, 3, 4
• 2, 3, 4
• 1, 4, 5
• 2, 3, 5
√ 2, 4, 5
 Which deficit financing method is described below? The government issues securities, sells them to the public and businesses, and uses
676. the proceeds to finance budget deficit

• Loans from other countries

• Issue of money
• Loans from other countries
• Loans from foreign financial instutions
√ Loans from the public and firms of the country

677. Which of them is not an advantage of issue of money financing method?

• Investment growth stimulation

• It is quick
• None of them
• GDP growth
√ It leads to the subsequent inflation

678. Which of them is an advantage of issue of money financing method?

• It is quick
• Investment growth stimulation
• GDP growth
√ All of the above
• None of them

Which deficit financing method is described below? State (Central Bank) increases the money supply, i.e. issues into circulation extra
679. money, through which it covers the excess of its expenditure over revenues

√ The issue of money

• Loans from other countries
• None of them
• Loans from public
• Loans from firms of country

680. Which in not true about internal debt?

• Internal loan only involves transfer of wealth within borrowing community

• Include individuals, banks, firms, etc
• Instrument include market loans, bonds, T-bills, etc
√ Repayable in any currency in the world
• Debt subscribed by persons or institutions inside country

681. Which is not true about the role of Central Bank in public debt management?

• It is entrusted with responsibility of imposing credit control measures

• Central Bank plays important role in public debt management
• It manages public debt of Central Bank and regional Governments
• It is largest single holder of government securities
√ All of the decision regarding public debt management is controlled by Central Bank only

682. Which of them is not an element of public debt management?

• Terminable annuities
• Sinking fund
• Additional taxation
• Capital levy
√ Deficit balance of the payments

683. Which of them is an element of public debt management?

 • Refunding
• Additional taxation
• Surplus budget
√ All of the above
• Conversion

684. Which of them is an objective of public debt management?

• It must serve economic policy of government

• Ensure financing needs of the government
• Minimize borrowing costs
• Support development of domestic markets
√ All of the above

685. Which of them is not an objective of public debt management?

• It must serve economic policy of government

• Ensure financing needs of the government
• Minimize borrowing costs
• Support development of domestic markets
√ Create a condition where borrowing is not necessary

686. Which of them is true about public debt management?

• It helps to know conditions which are essential for implementation of planning policies
• It gives knowledge of actual amount of requirements for implementation of certain policies
• Public debt policy place important role in formation of economic policy of country
√ All of the above
• Increase or decrease of public debt affects smooth functioning of any economy

687. Public debt management is coordinated through _______

• MoF only
√ the MoF and the CBAR
• President Administration
• Parlament
• CBAR only

688. Which of them is disadvantage of DMP?

• Fees and charges

√ All of the above
• DMP cannot write-off debts
• Secured loans cannot be paid by using DMP
• Not acceptable to creditors

689. Which of them is an advantage of DMP?

• It stops creditors calls

√ All of the above
• Flexibility
• Solution to bankruptcy
• Reduces interest rates and monthly payments

690. Which is not true about DMP?

• It is offered by debt management companies

√ DMP deal with secured and unsecured debt
• It can manage finance by using effective tips
• All of them is true
 • It relieves stress of payment

691. What is Debt Management Plan (DMP)?

• Method used in various countries for paying personal secured debt

√ A method used in various countries for paying personal unsecured debt
• Plan offered to debt management companies
• None of them
• Management of finance by using ineffective tips

692. Debt management is important for:

• Debt negotiation
√ All of the above
• Debt elimination
• None of them
• Debt consolidation

693. Importance of debt management:

• Helps borrowers to manage huge debts

√ All of the above
• Helps debtors to remove pressure from creditors
• Helps in debt elimination
• Helps in enhancing personal financial stability

694. What is monetary debt financing?

• Government receives loans from central bank, or directly sells their debt to the central bank
√ Issue of profitable government obligations that are freely bought and sold on the stock market until maturity
• Government issues extra money into circulation
• None of them
• Loans from other countries and their citizens or from international financial institutions

695. What is monetary deficit financing?

• Issue of profitable government obligations that are freely bought and sold on stock market until maturity
√ The government receives loans from central bank, or directly sells their debt to the central bank
• Government issues extra money into circulation
• None of them
• Loans from other countries and their citizens or from international financial institutions

696. What is budget deficit?

• Excess of budget revenues over expenditures

√ The excess of budget expenditures over revenues
• Social expenditures exceeding investment expennditures
• Investment expennditures exceeding social expenditures
• Evenness of budget revenues and expenditures

697. Which of them is a problem associated with internal debt?

• Provoking greater deficit

√ All of the above
• Pushes out private investment
• Reduction in funds intented for investment
• Threat of inflation

698. Which of them is a problem associated with external debt?

 • Reduction in domestic demand
√ All of the above
• Depletion of foreign reserves
• None of them
• Reduction in output

699. Which of them is the common advantage of taking loans internally and externally?

• Small GDP growth

• None of them
• Ability of getting large amounts
• It is fairly expeditious
√ A non-inflationary character