国际金融英文版课后答案

international finance国际金融notes to the answers:1、all the terms can be found in the text.2、the discussions can be attained by reading the original text.chapter 1 answers:ii. t t f f f t tiii. 1.reservecurrency2.appreciate3.waspeggedto4.deficit5. fixed exchange rates6. floating exchange rates7. depreciate8. market forcesiv. 1. confidence in the ability of the u.s. to redeem dollars for gold began to fall as potential claims against the dollar increased and u.s. gold reserves fell.2. underthefixedexchangeratesystem,thevalueofthedollarwastiedto gold through its convertibility in to gold at the u.s. treasury, and other nationscurrencies were tied to the dollar by the maintenance of a fixed rate of exchange.3. imf has adjusted its role in the exchange rate system in view of the development of the situation.4. after the collapse of the bretton woods system, the task of“rigorous monitoring”theexchange rate policy of member countries fell on the shoulder of imf.5. under normal conditions the stabilizing operations were sufficient to contain short-run fluctuations in a currencys price within the required bounds of 1% of par value and thereby maintain a system of fixed exchange rates.chapter 2answers:i. liquid, turnover, due to, hedge, cross trading, electronic broking, outright forwards, over-the-counter, futures and options, derivatives, remainder.ii. 1. the fundamental changes occurred in post-war world economy. the international flow of commodities, capital and labor is intensifying, thus leading to integration of international markets.1. oftenreferredtoas“financialinstitutionswithasoul ”,creditunionsaremember-owned cooperatives that offer checking accounts, savings accounts, credit cards, and consumer loans.2. if youthink the priceof gold will rise,youcan buy a mostsimplekind of financial derivative which is called“futures ”. if by that time the price really goes up, then youmake a gain. but if you make a wrong guess and the price declines, then you suffer a loss.3. financial derivatives are financial commodities deriving from such spot market products as interest rate or bond, foreign exchange or foreign exchange rate and stock or stock indexes. there are mainly three types of derivatives: futures, optionsand swaps, each of which involves a mix of financial contracts.4. companiesandinvestmentfundsareusingbasiccurrencyfuturesandcurrency精品资料options,onesthatareregardedas traditionalhedgingproductsfor investorswho want to protect their international assets from sharp gains and declines in currencyprices.chapter 3answers ：ii. 1. deposit accounts2. securitization3. deregulation4. consolidation5. portfolio6. thrift institutions7. listing8. liquidity9. banking supervision10. credit riskiii. 1. depository institutions2. commercial banks3. credit analysis4. working capital5. consolidation6. financing7. moral hazard8. bank supervision and regulation9.credit risk10. liquidity riskiv. 1. if a banks base rate was below money market rates, a customer could borrow from a bank and lend these funds to the money market, thus making a profit on the deal.2. financing of international trade is one of the basic functions of a commercial bank.notonlydoesit fatherdeposits(demand,timeandsavingsaccounts),butit also grants loans.3. if youhavea credit card,you buya car,eat adinner, take a trip,and even get a haircut by charging the cost to your account.4. as the central bank and under the leadership of the state council, the peoples bankof chinawill formulateandimplementmonetarypolicies,executesupervisionand control power over the banking industry.5. one of major function of the central bank is the supervision of the clearing mechanism. a reliable clearing mechanism which can settle inter-bank transaction with high efficiency is crucial to a well-operated financial system.chapter 4answers:ii. 1 integrity2. pretext3. released4. produce5. facilities6. obliged7. alleging8. claims9. cleared10. deliveryiii. 1. in favor of2. consignment3. undertaking, terms and conditions4. cleared5.regardless of6. obliged to7. undervalue arrangement8. on the pretext of9. refrain from10. hinges oniv. 1. the objective of documentary credits is to facilitate international payment by making use of the financial expertise and credit worthiness of one or more banks.2. in compliancewithyourrequest,wehaveeffectedinsuranceon yourbehalfand debited your account with the premium in the amount of $1000.3. whenan exporteris tradingregularlywithan importer,he will offeropenaccount terms.4. exporters usually insist on payment by cash in advance when they are trading with old customers.5. cash in advance means that the exporter is paid either when the importer places hisorder or when the goods are ready for shipment.chapter 5.ii 1. b2. c3. c4. a5. b6. b7. a8. ciii. 1. guaranteed2. without recourse3. defaults4. on the buyers account5. is equivalent to6. in question7. devaluation8. validity9. discrepancy10.inconsistent withchapter 6answers:ii. 1. open account, creditworthiness2. demand3. draw on, creditor4. protest5. schedule, discrepancies6. acceptance7. drawee8. guranteediii. 1. collecting bank2. tenor3. the proceeds4. protest5. deferred payment6. presentation7.thematuritydate8.adocumentoftitle9.theshipping documents10. transshipmentiv. 1. documentary collection is a method by which the exporter authorizes the bankto collect money from the importer.2. when a draft is duly presented for acceptance or payment but the acceptance or payment is refused, the draft is said to be dishonored.3. intheinternationalmoneymarket,draftisacirculativeandtransferableinstrument. endorsement serves to transfer the title of a draft to the transferee.4. a clean bill of lading is favored by the buyer and the banks for financial settlement purposes.5. parcel post receipt is issued by the post office for goods sent by parcel post. it isbothareceiptandevidenceofdispatchandalsothebasisforclaimand adjustment if there is any damage to or loss of parcels.chapter 7ii. financing, discounting, factoring, forfaiting, without recourse, accounts receivable, factor, trade obligations, promissory notes, trade receivables, specialized.iii. 1. a cash flow disadvantage 2. without recourse 3. negotiable instruments 4. promissory notes 5. profit margin 6. at a discount, maturity, credit risk 7. a bill of exchange, a promissory noteiv. 1.when a bill is dishonored by non-acceptance or by non-payment, the holder then has an immediate right of recourse against the drawer and the endorsers.2. ifabillofladingismadeouttobearer,itcanbelegallytransferredwithoutendorsement.3. thepresentingbankshouldendeavorto ascertainthereasonsnon-paymentor non-acceptance and advise accordingly to the collecting bank.4. anychargesandexpensesincurredbybanksinconnectionwithanyactionforprotection of the goods will be for the account of the principal.5. anyone who has a current account at a bank can use a cheque.chapter eightstructure of the foreign exchange market外汇市场的构成1. key terms1） foreign exchange ：“foreignexchange ”referstomoneydenominatedin thecurrencyof another nation or group of nations.2） payment“payment ”isthe transmissionof aninstructiontotransfervaluethat results from a transaction in the economy.3） settlement“settlement ”is the final and unconditional transfer of the value specified in a payment instruction.2. true or false1) true 2) true 3) true 4) true3. cloze1)the dollar is by far the most widely traded currency. in part, the widespread use of the dollar reflects its substantial international roleas:“investment ” currencyinmanycapitalmarkets,“reserve ” currency held by many central banks,“transaction ”currency in many internationalcommoditymarkets,“invoice ” currency inmany contracts,and“intervention ” currencyemployedby monetary authorities in market operations to influence their own exchange rates.in addition, the widespread trading of the dollar reflects its use as a “vehicle ” currencyinforeignexchangetransactions,ausethat reinforces,andisreinforcedby,itsinternationalroleintradeandfinance.2） in foreignexchangetrading,londonbenefitsnot onlyfromits proximitytomajoreurocurrencycreditmarketsandotherfinancialmarkets,butalsofromitsgeographicallocationandtimezone.inaddition to being open when the numerous other financial centers in europe are open, londons morning hours overlap with the late hoursin a number of asian and middle east markets; londons afternoon sessions correspond to the morning periods in the large north american market. thus, surveys have indicated that there is more foreign exchange trading in dollars in london than in the united states.4. discussions1) tell the reasons why the dollar is the markets most widely traded currency?key points: u.s.a economic background; the leadership of usd in the world economy ; the role it plays in investment , trade, etc.2) what kind of market is the foreign exchange market?make reference to the following parts: （ 8.7 the market is made up of an international network of dealers ）chapter 91. key terms1) spot transactioninstruments交易工具a spot transaction is a straightforward (or“outright ”) exchange of one currencyforanother.thespotrateisthecurrentmarketprice,the benchmark price.spot transactions do not require immediate settlement, or payment“on thespot. ”byconvention,thesettlementdate,or“valuedate, ”isthe second business day after the“deal date ”(or“trade date ”) on which the transaction is agreed to by the two traders. the two-day period providesample time for the two parties to confirm the agreement and arrange the clearing and necessary debiting and crediting of bank accounts in various international locations.2) american termsthe phrase“americanterms ”meansa directquotefrom the pointofview of someone located in the united states. for the dollar, that means that the rate is quoted in variable amounts of u.s. dollars and cents per one unit of foreign currency (e.g., $1.2270 per euro).3) outright forward transactionanoutrightforwardtransaction,likeaspottransaction,isa straightforward single purchase/ sale of one currency for another. the only difference is that spot is settled, or delivered, on a value date no later thantwo business days after the deal date, while outright forward is settled onany pre-agreed date three or more business days after the deal date. dealers use the term “outright forward ”to make clear that it is a single purchase or sale on a future date, and not part of an “fx swap ”.4) fx swapan fx swap has two separate legs settling on two different value dates, even though it is arranged as a single transaction and is recorded in the turnover statistics as a single transaction. the two counterparties agree toexchange two currencies at a particular rate on one date (the“near date ”)and to reverse payments, almost always at a different rate, on a specified subsequent date (the“far date ”). effectively, it is a spot transaction and an outrightforwardtransactiongoinginoppositedirections,orelsetwo outrightforwardswithdifferentsettlementdates,andgoinginopposite directions. if both dates are less than one month from the deal date, it is a “short-dated swap ”; if one or both dates are one month or more from thedeal date, it is a“forward swap. ”5) put-call parity“put-call parity ”says that the price of a european put (or call) option can be deduced from the price of a european call (or put) option on the same currency, with the same strike price and expiration. when the strike priceis the same as the forward rate (an“at-the-money ”forward), the put and the call will be equal in value. when the strike price is not the same as the forward price, the difference between the value of the put and the value ofthecallwillequalthedifferenceinthepresentvaluesofthetwo currencies.2. true or false1) true 2) true 3) true3. cloze1) traders in the market thus know that for any currency pair, if the base currency earns a higher interest rate than the terms currency, the currency will trade at a forward discount, or below the spot rate; and if the base currency earns a lower interest rate than the terms currency, the base currency will trade at a forward premium, or above the spotrate.whicheversideofthetransactionthetraderis on,the traderwontgain(orlose)fromboththeinterestratedifferentialandthe forward premium/discount. a trader who loses on the interest rate willearn the forward premium, and vice versa.2) a call option is the right, but not the obligation, to buy the underlying currency,and a put optionis the right,but notthe obligation,to sell theunderlyingcurrency.allcurrencyoptiontradesinvolvetwo sides the purchase of one currency and the sale of another so that a put to sell pounds sterling for dollars at a certain price is also a call tobuy dollars for pounds sterling at that price. the purchased currency is thecallside of the trade, and the sold currency is the put side of the trade. the party who purchases the option is the holder or buyer, andthe partywhocreatestheoptionis the selleror writer.the priceat which the underlying currency may be bought or sold is the exercise ,or strike, price. the option premium is the price of the option that the buyer pays to the writer. in exchange for paying the option premium upfront,thebuyergainsinsuranceagainstadversemovementsin theunderlying spot exchange rate while retaining the opportunity to benefit from favorable movements. the option writer, on the other hand, is exposed to unbounded risk although the writer can (andtypicallydoes)seekto protecthimselfthroughhedgingor offsettingtransactions.4. discussions1) what is a derivate financial instrument? why is traded?2) discuss the differences between forward and futures markets in foreign currency.3) what advantagesdo foreigncurrency futureshave over foreign currency options?4) what is meant if an option is“in the money ”, “out of the money”, or “at the money ”?5) whatmajorinternationalcontractsaretradedonthechicago mercantile exchange ? philadelphia stock exchange?chapter 101. key termsmanaging risk in foreign exchange trading外汇市场交易的风险管理1) market riskmarketrisk,in simplestterms,is pricerisk,or “exposureto (adverse) pricechange. ”for a dealerin foreignexchange,two major elementsof market risk are exchange rate risk and interest rate risk that is, risks of adverse change in a currency rate or in an interest rate.2) varvar estimates the potential loss from market risk across an entire portfolio, using probability concepts. it seeks to identify the fundamental risks that the portfolio contains, so that the portfolio can be decomposedinto underlying risk factors that can be quantified and managed. employing standardstatisticaltechniqueswidelyusedin otherfields,and basedin part on past experience, var can be used to estimate the daily statistical variance, or standard deviation, or volatility, of the entire portfolio. on thebasis of that estimate of variance, it is possible to estimate the expectedlossfromadversepricemovementswitha specifiedprobabilityovera particular period of time (usually a day).3) credit riskcredit risk, inherent in all banking activities, arises from the possibilitythat the counterparty to a contract cannot or will not make the agreed payment at maturity. when an institution provides credit, whatever the form, it expects to be repaid. when a bank or other dealing institution enters a foreign exchange contract, it faces a risk that the counterparty willnot perform according to the provisions of the contract. between the time of the deal and the time of the settlement, be it a matter of hours, days, ormonths, there is an extension of credit by both parties and an acceptance of credit risk by the banks or other financial institutions involved. as in thecaseofmarketrisk,creditriskisoneof thefundamentalriskstobe monitored and controlled in foreign exchange trading.4) legal riskstherearelegalrisks,ortheriskoflossthatacontractcannotbe enforced, which may occur, for example, because the counterparty is not legally capable of making the binding agreement, or because of insufficient documentation or a contract in conflict with statutes or regulatory policy.2. true or false1) true 2) true3. translation1) broadlyspeaking,therisksin tradingforeignexchangearethe same as those in marketing other financial products. these risks canbe categorized and subdivided in any number of ways, depending onthe particular focus desired and the degree of detail sought. here, thefocus is on two of the basic categories of risk market risk and credit risk(includingsettlementriskandsovereignrisk) as theyapplyto foreign exchange trading. note is also taken of some other importantrisksinforeignexchangetrading liquidityrisk,legalrisk,and operational risk2) it was noted that foreign exchange trading is subject to a pa