¡¡¡¡Section ¢ò Reading Comprehension

¡¡¡¡Part A

¡¡¡¡Directions:

¡¡¡¡Read the following four texts.Answer the questions below each text by choosing A, B, C or D.Mark your answers on ANSWER SHEET 1.(40 points)

¡¡¡¡Text1

¡¡¡¡As a young bond trader, Buttonwood was given two pieces of advice, trading rules of thumb, if you will: that bad economic news is good news for bond markets and that every utterance dropping from the lips of Paul Volcker, the then chairman of the Federal Reserve, and the man who restored the central bank¡¯s credibility by stomping on runaway inflation, should be respected than Pope¡¯s orders.Today¡¯s traders are, of course, a more sophisticated bunch.But the advice still seems good, apart from two slight drawbacks.The first is that the wellª²chosen utterances from the present chairman of the Federal Reserve, Alan Greenspan, is of more than passing difficulty.The second is that, of late, good news for the economy has not seemed to upset bond investors all that much.For all the cheer that has crackled down the wires, the yield on tenª²year bondsª²which you would expect to rise on good economic newsª²is now, at 4.2%, only twoª²fifths of a percentage point higher than it was at the start of the year.Pretty much unmoved, in other words.

¡¡¡¡Yet the news from the economic front has been better by far than anyone could have expected.On Tuesday November 25th, revised numbers showed that America¡¯s economy grew by an annual 8.2% in the third quarter, a full percentage point more than originally thought, driven by the everª²spendthrift American consumer and, for once, corporate investment.Just about every other piece of information coming out from special sources shows the same strength.New houses are still being built at a fair clip.Exports are rising, for all the protectionist crying.Even employment, in what had been mocked as a jobless recovery, increased by 125,000 or thereabouts in September and October.Rising corporate profits, low credit spreads and the biggestª²ever rally in the junkª²bond market do not, on the face of it, suggest anything other than a deep and longª²lasting recovery.Yet Treasuryª²bond yields have fallen.

¡¡¡¡If the rosy economic backdrop makes this odd, making it doubly odd is an apparent absence of foreign demand.Foreign buyers of Treasuries, especially Asian certral banks, who had been swallowing American government debt like there was no tomorrow, seem to have had second thoughts lately.In September, according to the latest available figures, foreigners bought only $5 6 billion of Treasuries, compared with $25.1 billion the previous month and an average of $38.7 billion in the preceding four months.In an effort to keep a lid on the yen¡¯s rise, the Japanese central bank is still busy buying dollars and parking the money in government debt.Just about everyboby else seems to have been selling.

¡¡¡¡21.The advice for Buttonwood suggests that.

¡¡¡¡[A] Paul Volcker enjoyed making comments on controlling inflation

¡¡¡¡[B] the Federal Reserve has an allª²capable power over inflation control

¡¡¡¡[C] economy has the greatest influence upon the daily life of ordinary people

¡¡¡¡[D] the economic sphere and bond markets are indicative of each other

¡¡¡¡22.The word ¡°passing¡±(Line 7, Paragraph 1) most probably means.

¡¡¡¡[A] instant[B] trivial[C] simple[D] negligible

¡¡¡¡23.Which of the following is responsible for the rapid economic growth in the US?

¡¡¡¡[A] Domestic consumers.[B] Foreign investments.

¡¡¡¡[C] Real estate market.[D] Recovering bond market.

¡¡¡¡24.According to the last paragraph, most Asian central banks are becoming.

¡¡¡¡[A] rather regretful[B] less ambitious

¡¡¡¡[C] more cautious[D] speculative

¡¡¡¡25.The phrase ¡°keep a lid on¡±(Line 6, Paragraph 3) most probably means.

¡¡¡¡[A] put an end to[B] set a limit on

¡¡¡¡[C] tighten the control over[D] reduce the speed of

¡¡¡¡Text2

¡¡¡¡Pressure is mounting on Ahold¡¯s embattled supervisory board following the Dutch grocery group¡¯s decision to pay its new chief executive more than C= 10m to lead its recovery from a ruining accounting scandal.

¡¡¡¡Anders Moberg¡¯s pay packageª²and the timing of its disclosure at a shareholder meeting last weekª²has confronted Ahold with a new credibility crisis as it struggles to restore confidence after the C=970m ( $1 bn) scandal.

¡¡¡¡The disputeª²evident in a sea of critical media comment in the Netherlands at the weekend threatens to divert management from its recovery strategy, built on significant divestments and a likely rights issue to reduce C=11bn in net debt.Units deemed unable to attain first or second position in food retail within three to five years will immediately be put up for sale.

¡¡¡¡The board¡¯s position appears all the more delicate following comments made by Mr.Moberg to the Financial Times, in which he criticized nonª²executive directors for ignoring his advice to disclose his salary in May, when he agreed his contract.

¡¡¡¡Instead Ahold waited more than four months to make the announcement, on the day shareª²holders were asked to approve Mr.Moberg¡¯s appointment.

¡¡¡¡¡°I was the one who said I liked transparency, and I had hoped [the supervisory board] had shown [the salary package] in May to avoid a situation like this,¡± Mr.Moberg told the FT.As the row prompted the leftª²leaning Dutch Daily to call for a boycott of Ahold¡¯s Dutch Albert Heijn supermarket chain where only last week Ahold announced 440 redundanciesª²it was clear the supervisory board had badly misjudged the reaction.

¡¡¡¡While Henny de Ruiter, supervisory board chairman, said the salary was a fair reflection of what a company in Ahold¡¯s unfavorable circumstances had to pay to attract a top manager,furious investors accused it of pushing through the package regardless of investor opinion.

¡¡¡¡Furthermore, Dutch media commentators noted that the scandal at Ahold had been the trigger for the Dutch government to appoint a commission to strengthen corporate governance.

¡¡¡¡That commission has recommended a limit on executive bonuses, far below the potential twoª²andª²aª²half times annual salary that Mr.Moberg could earn.

¡¡¡¡Meanwhile, Mr.Moberg is trying to distance himself from the row and focus on strategy.He told the FT that measures had already been taken to raise its stake in the ICAª²Ahold joint venture in Scandinavia.

¡¡¡¡Ahold had included in its forecasts an amount necessary to buy the shares of either of its joint venture partners, who should exercise a ¡°put option¡± and sell their stake from April 2004.

¡¡¡¡26.The decision on Anders Moberg¡¯s pay package has.

¡¡¡¡[A] incurred much criticism from the shareholders

¡¡¡¡[B] helped restore public confidence in Ahold

¡¡¡¡[C] saved the supervisory board from another crisis

¡¡¡¡[D] put pressure on the new chief executive

¡¡¡¡27.The recovery strategy by Ahold¡¯s management includes.

¡¡¡¡[A] avoiding the next accounting scandal

¡¡¡¡[B] diverting investment to other fields

¡¡¡¡[C] issuing rights to more retailers

¡¡¡¡[D] selling the retailers with poor performance

¡¡¡¡28.Anders Moberg thought that if his salary had been announced earlier,.

¡¡¡¡[A] the board¡¯s position would have become less difficult

¡¡¡¡[B] he would have agreed to the contract with Ahold

¡¡¡¡[C] more time could have been devoted to his recovery plan

¡¡¡¡[D] the shareholders wouldn¡¯t have strongly opposed

¡¡¡¡29.Before the scandal at Ahold, the executive bonuses in Dutch companies.

¡¡¡¡[A] were higher than what Moberg earned

¡¡¡¡[B] were regulated by a commission

¡¡¡¡[C] were not monitored by the government

¡¡¡¡[D] were not set by corporate management

¡¡¡¡30.According to Moberg¡¯s recovery strategy, Ahold will.

¡¡¡¡[A] sell its stake to other joint venture companies

¡¡¡¡[B] buy shares of its Scandinavian partners

¡¡¡¡[C] choose to put money in its chain shops in Scandinavia

¡¡¡¡[D] exerc ise its potential influence on partners