1. Please define A, B, H, N, S shares in the Chinese stock
2. What is a volume of China’s interbank bond market in 2014
3. If you put ￥100 in a bank, how much will it be worth in 10
years? Suppose the interest rate is constant at 4%.
4. Suppose you will receive 1000 Yuan in 5 years, what is the
present value of this 1000 Yuan if the interest rate is constant at
5. Give your definition of “risk averse” behavior and
ilustrate with an example.
6. Give your definitions of “adverse selection” and “Moral
hazard” and discuss briefly the effects of the behavior on the
functioning of the financial system.
7. Define the unemployment rate and discuss the factors that
may affect the long-term unemployment rate.
8. What are the functions of money? If an economy keeps
printing the money how these functions might be affected?
9. Why is money supply related to a country’s balance of
payments? If China decides to consumes its stock of foreign
exchange reserves, what will happen to China’s money supply and
10. Explain how we should measure the openness of an economy.
Please compute your country’s trade/GDP ratio an compare that with
that of China.
11. Suppose that in 1998 during the Asian Financial Crisis,
the RMB-dollar exchange rate was kept unchanged around 8.30 Yuan
per dollar, while in 2005, the rate dropped to 8.10 Yuan per
dollar. From 1998 to 2005, China’s consumer price index (CPI)
increased by 2.0% while the US consumer price index rose by
(1) Calculate the real exchange rate between the RMB and the
dollar for 2005
(2) Has the RMB depreciated or appreciated in real terms
against the dollar between 1998 and 2005.
(3) Why has the International Monetary Fund argued that the
RMB has been undervalued and thus should be re-valued.
10. Suppose tomato was 4Yuan/jin in China and $1.58/jin in the
US. Using the concept of the PPP to calculate tomato exchange rate
between the RMB and the dollar.
Time due: April 4, 2019