金融英语chapter

FinancialEnglish,金融英语cn.liuchang,CourseStructure,Chapter1Money,theInterestRatesandtheFinancialSystemChapter2CentralBankChapter3CommercialBankChapter4InvestmentBankChapter5MoneyMarket,CourseStructure,Chapter6CapitalMarketChapter7ForeignexchangeMarketChapter8TheBalanceofInternationalPaymentsChapter9InternationalSettlementsChapter10RiskandInsurance,Benefits,FinancialEnglishcoursewillprovideyouwith:-Improvethefinancialvocabulary-Understandbasicdefinitionsandbusinessprocedures,Benefits,-Greaterconfidencewhendiscussingfinancialdocumentsanddata-Increasedverbalfluencyforface-to-facenegotiations-TheconfidencetoproduceprofessionalwrittenreportsinEnglish-KeyfinancialEnglishterminology,Thereforeto,Prepareforfurtherlearning,forexample,academicEnglishreadingsduringmasterprogram,Requirements,Attendance10%Assignment10%Presentation10%Exam70%Total100%,Requirements,Attendance20%Assignment20%Exam60%Total100%,Chapter1Money,theInterestRatesandtheFinancialSystem,Part1Money,1.OriginofMoney2.DefinitionofMoney3.FunctionsofMoney4.FormsofMoney,Questions,Whatismoney?Whendidmoneyappear?Whatarethefunctionsofmoney?Whatarethetypesofmoney?Howcanwemeasuremoney?,Question,WhenyoubuyapairofjeansoraCD,forexample,youneverwonderwhetherthemerchantwillacceptthebillsandcoinsinyourwalletaspayment.Butsupposemoneydidntexist.Howwouldyoupayforthethingsyouwanttobuy?,1.OriginofMoney,Barterexchangegoodswithgoods.Suchas:Goat,stone,ox,salt,shell,peal,jade,iron,DisadvantagesofBarterDeteriorationIndivisibilityInefficientandProtracted(rateofexchange)Doublecoincidenceofwantssilver,goldovercamesuchshortcomings,13centuryA.D.,Papercurrency(fiatmoney)BillofexchangePromissoryNoteCheque/check,CommoditymoneyPreciousmetalslikegoldandsilver,ExchangeforGBP1,250.00Beijing,1April,2003AtsightpaytotheorderofDEFCo.thesumofPoundsonethousandtwohundredandfiftyonlyToXYZBank,ForABCCo.,BeijingLondon(signature),Endof18century,ExpensiveRiskyTurnoveroffundsslow,Foreignexchangebank,EvolutionofMoney,Papercurrency(fiatmoney)(intrinsicallyworthless)Fiatmoneyhasnotonlynoparticularvalueinuse;itdoesntevenreallyhaveavalueinexchangeexceptthatwhichisdecreedthatitwouldhave.Checks18thcenturyElectronicmeansofpaymentcreditcard.,2.DefinitionofMoney,Question1:Whatismoney?seep1,p9Moneycanbedescribedasanycommodityortokenthatisgenerallyacceptableasameansofpaymentforgoodsorservicesorintherepaymentofdebt.货币是普遍作为支付手段接受的任何一种商品或符号。Canyoulistsomekindsofmoney?Papercash,coins,2.DefinitionofMoney,Question2:Doyouknowcurrencyandmoney?Currencyconsistingofdollarbillsandcoins,isonetypeofmoney.Andthereareothertypesofmoneyarenotcurrency,suchascheck,savingdeposits.,2.DefinitionofMoney,Question3:Doyouknowthedifferencebetweenwealthandmoney?Wealthmeansgreatamountofproperty,money,etc.(1)Intheprivatesense,allpropertywhichhasamoneyvalue.(2)Inthepublicsense,allobjects,esp.materialobjects,whichhaveeconomicutility.Canyoulistsomekindsofwealthdonotbelongtomoney?Art,houses,stocks,bonds,cars,jewels,2.DefinitionofMoney,Question4:Doyouknowthedifferencebetweenincomeandmoney?Incomeisaflowofearningsperunitoftime;Moneyisastock:itisacertainamountatagivenpointintime.,Additionalquestion,Whatisdifferencebetweenrevenueandincome?Forcorporations,revenuesminuscostofsales,operatingexpenses,andtaxes,overagivenperiodoftime.,Functionsofmoney,MediumofexchangeUnitofaccountStoreofvalue,Mediumofexchange,Inalmostallmarkettransactionsinoureconomy,moneyintheformofcurrencyorchecksisamediumofexchange;itisusedtopayforgoodsandservices.Theuseofmoneyasamediumofexchangepromoteseconomicefficiencybyeliminatingmuchofthetimespentinexchanginggoodsandservices.,Mediumofexchange,Thetimespenttryingtoexchangegoodsorservicesiscalledatransactioncost.Inabartereconomy,transactioncostsarehighbecausepeoplehavetosatisfya“doublecoincidenceofwants”theyhavetofindsomeonewhohasgoodsorservicetheywantandwhoalsowantsthegoodsorservicetheyhavetooffer.,Mediumofexchange,Moneyisthereforeessentialinaneconomyitisalubricantthatallowstheeconomytorunmoresmoothlybyloweringtransactioncosts,therebyencouragingspecializationandthedivisionoflabor.,Unitofaccount,Thesecondroleofmoneyistoprovideaunitofaccount;thatis,itisusedtomeasurevalueintheeconomy.Wemeasurethevalueofgoodsandservicesintermsofmoney,justaswemeasureweightintermsofpoundsordistanceintermsofmiles.,Storeofvalue,Moneyalsofunctionsasastoreofvalue:itisarepositoryofpurchasingpowerovertime.Itisanasset.Itssomethingthatwecanusetostorevalueawaytoberetrievedatalaterpointintime.Sowecannotconsumetoday,wecanholdmoneyinsteadandtransferthatconsumptionpowertosomepointinthefuture.,Ismoneytheonlychoicewehavetostorevalue?,Theyoftenpaytheownerahigherinterestratethanmoney,experiencepriceappreciation,anddeliverservicessuchasprovidingaroofoveroneshead.,Iftheseassetsareamoredesirablestoreofvaluethanmoney,whydopeopleholdmoneyatall?,Liquidity,Therelativeeaseandspeedwithwhichanassetcanbeconvertedintoamediumofexchange.,Liquidity,Liquidityishighlydesirable.Moneyisthemostliquidassetofallbecauseitisthemediumofexchange;itdoesnothavetobeconvertedintoanythingelseinordertomakepurchases.Otherassetsinvolvetransactioncostswhentheyareconvertedintomoney.,Simplyspeaking,Moneyisamediumofexchangeacceptedbythecommunity,meaningitswhatpeoplebuythingswithandsellthingsfor.Moneyprovidesastandardformeasuringvalue(unitofaccount),sothattheworthofdifferentgoodsandservicescanbecompared.moneyisastoreofvaluethatcanbesavedforlaterpurchases.,TheMonetaryAggregates,M0现金(currencypapermoneyandcoins)M1狭义货币供应量=M0+活期存款(demanddeposit)M2广义货币供应量=M1+定期存款(timedeposit)+储蓄存款(savingsdeposit)+其他存款+货币市场共同基金M3=M2+大额定期存款和期限存款,M0现金(currencypapermoneyandcoins),Thebillsandcoinsthatweusetodayareknownascurrency我们今天所用的纸币和硬币通称为现金。,Depositsatbanksandotherfinancialinstitutionsarealsomoneybecausetheycanbeconvertedintocurrencyandbecausetheyareusedtosettledebts在银行和其他金融机构的存款也是货币，因为它们可以变为现金和用于结清债务。,M1狭义货币供应量=M0+活期存款(demanddeposit),M1consistsofcurrencyandtravelerscheckspluscheckingdepositsownedbyindividualsandbusinessesanditdoesnotincludecurrencyheldbybanks，anditdoesnotincludecurrencyandcheckingaccountownedbythegovernmentM1包括个人与企业拥有的现金和旅行支票加支票存款，M1不包括银行持有的现金，也不包括政府所拥有的现金和支票存款。,M2,M2consistsofM1plussavingsdeposits，timedeposits，moneymarketmutualfunds，andother，depositsM2包括M1加储蓄存款、定期存款、货币市场共同基金，以及其他存款。,M3,M3,whichconsistsofM2pluslargescaletimedepositsandtermdepositsM3包括M2加大额定期存款和期限存款。大额定期存款存款单有一定的最低额，例如美国的美元可转让存款单为10万美元，伦敦的英镑可转让存款单为5万英磅，金额的最小单位为千，故又称大额存单。期限存款的期限一般较长，如教育储蓄等,Interestratesareamongthemostcloselywatchedvariablesintheeconomy.Theirmovementsarereportedalmostdailybythenewsmediabecausetheydirectlyaffectoureverydaylivesandhaveimportantconsequencesforthehealthoftheeconomy.,Part2InterestandIR,Introduction,Theyaffectpersonaldecisionssuchaswhethertoconsumeorsave,whethertobuyahouse,andwhethertopurchasebondsorputfundsintoasavingaccount.Interestratesalsoaffecttheeconomicdecisionsofbusinessesandhouseholds,suchaswhethertousetheirfundstoinvestinnewequipmentforfactoriesortosavetheirmoneyinabank.,EssenceofInterestTypesofInterestRatesCalculationofInterestDeterminantsofInterestRatesFunctionsofInterestRatesTheStructureofInterestRates,EssenceofInterest,Thefeechargedbyalendertoaborrowerfortheuseofborrowedmoney,usuallyexpressedasanannualpercentageoftheprincipal,“假如一个人在不论自己如何需要，在到期之前也不得要求偿还的条件下，借出自己的货币，则他对自己所受到的不方便可以索取补偿，这是不成问题的。这种补偿，我们通常叫做利息。”英国政治经济学创始人威廉配第(WilliamPetty，1623-1687),WhatisInterestRate?,Theinterestrateistheyearlypricechargedbyalendertoaborrowerinorderfortheborrowertoobtainaloan.Thisisusuallyexpressedasapercentageofthetotalamountloaned,IRandYield,UnitofinterestlevelPrior-factorRateofreturnPost-factor,TypesofInterestRate,AverageinterestrateandbasisinterestrateARusuallyisfortheoreticalanalysisBRisthefoundationofallotherkindsofinterestrateFixedrateandfloatingrateFRdoesntchangeduringtheloanterm,easyforcalculatingcostandprofitFLRchangesduringtheloantermundercertainconditions,usuallyhalfyearonce.,TypesofInterestRate,TheofficialinterestrateandmarketinterestrateSetbydifferentparties,marketorgovernmentGeneralinterestrateandprimeinterestrateDifferentloanobjects,DiscountGovernmentLoanNominalinterestrateandrealinterestrateInflation,Inflation,Whentheamountofmoneycirculatinggrowsfasterthantherateatwhichgoodsandservicesareproduced,theresultisinflation.inflationtoomuchmoneychasingtoofewgoods.Hyperinflationarapidriseinpricesthatseriouslydamagesacountryseconomy.,Inflation,ItcreatesaninefficientpricesystemItalsodistortsdecision-making,reducesproductivityandlowerstheeconomyslong-termrateofgrowth.Itresultsinlowerlivingstandardsforeveryone,Inflation,Sofarinourdiscussionofinterestrates,wehaveignoredtheeffectsofinflationonthecostofborrowing.Whatwehaveuptonowbeencallingtheinterestratemakesnoallowanceforinflation,anditismorepreciselyreferredtoasthenominalinterestrate,whichistodistinguishitfromtherealinterestrate,theinterestratethatisadjustedbysubtractingexpectedchangesinthepricelevelsothatitmoreaccuratelyreflectsthetruecostofborrowing.,Inflation,TherealinterestrateismoreaccuratelydefinedbytheFisherequation.ItstatesthatthenominalinterestrateiequalstherealinterestrateIplustheexpectedrateofinflationX.Therealinterestrateislikelytobeabetterindicatoroftheincentivestoborrowandlend.Whentherealinterestrateislow,therearegreaterincentivestoborrowandfewerincentivestolend.,名义利率和真实利率的关系,假定某年度物价没有发生变化，某人从其他人那里获得一年期的100万元贷款，年利息额为5万元，则名义利率和实际利率相同，都是5%。如果某一年的通胀率为10%，为了避免通胀给本金带来的损失，假设债权人依然要获得5%的真实利率收益，那么该债权人要以多大的名义利率贷出他手中的货币呢？,单利计算=(1+nr)/(1+p1)(1+p2)(1+pn)-11/n复利计算=(1+r)/(1+p1)(1+p2)(1+pn)1/n-1假如一笔贷款的期限为3年，名义利率为年15%，三年的通胀率分别为10%，11%，12%，计算两种不同标准的真实利率。,CalculationofInterest,SingleInterestNomatterhowlongtheloantermis,interestonlywillbecalculatedbasedontheprincipal,notincludingtheinterestoccurredattheendofeachtermperiod.Forexample,principalis$1000,interestrateis10%peryear,loantermis3year.Soattheendofthirdyear,whatisthesumofprincipalandinterest?,CalculationofInterest,FormulasforsingleinterestcalculationR=P*r*n(Risinterest,Pisprincipal,risinterestrate,nisthenumberofyear)F=P(1+rn),CalculationofInterest,CompoundInterestInterestwhichiscalculatednotonlyontheinitialprincipalbutalsotheaccumulatedinterestofpriorperiodsForexample,principalis$1000,interestrateis10%peryear,loantermis3yearSoattheendofthirdyear,whatisthesumofprincipalandinterest?,CalculationofInterest,FormulasforcompoundinterestcalculationR=P(1+r)n-1(Risinterest,Pisprincipal,risinterestrate,nisthenumberofyear)F=P(1+r)n,ClassExercise,Supposeyouputyoursalariesattheendofeachmonthwith$100intobank,andyouplannedtokeepsavingfor10yearswithanannualinterestrateof12%.Soifyouwillgetretireattheendof10thyear,howmuchmoneycouldyougetbackfrombank?R=P*r*n(n+1)/2Singleinterest19260,ClassExercise,Supposeyouput$1000atthebeginningofeveryyearintobankfor10yearslong.Theannualcompoundinterestrateis12%.Sohowmuchcouldyougetbackfrombankattheendof10thyear?F=P(1+r)n+1-1-r/rCompoundinterestrate19658,ClassExercise,Supposeyouput$10000intobankatthebeginningoffirstyear.Withanannualcompoundinterestrate15%,whatismaximumamountofmoneythatyoucantakeoutfrombankwithin3years?A=Pr(1+r)n/(1+r)n-1Compoundinterestrate4379.8,ClassExercise,Ifyouwanttoensurethatyoucanhaveatleast$60000eachyearafterretirementbetween60to80yearsoldwithanannualcompoundinterestrate10%.Alsowesupposeyouattendtoworkfrom20yearsold,whatisminimumsalarylevelofeachyearwithanannualcompoundinterestrate15%?,PresentValueandFutureValue,Theconceptofpresentvalueisbasedonthecommonsensenotionthatadollarofcashflowpaidtoyouoneyearfromnowislessvaluabletoyouthanadollarpaidtoyoutoday.Simpleloan,PresentValueandFutureValue,Thesumofprincipalandinterestwhichusescompoundinteresttocomputeiscalledfuturevalue.Byitsconversecalculation,theprincipal,namelypresentvalue,alsocouldbefiguredoutwiththefuturevalueandinterestrate.Boththosetwoconceptshaveveryextensiveusageinthereallife,suchasamortizationandretirementpension.,ClassExercise,Nowyouhavetwochoicesbyinvestingonaproject.PlanAistospend500milliondollarsinyear1,200milliondollarsbothinyear2and3.PlanBistoinvest100milliondollarsinyear1,300inyear2,600inyear3.Withanannualinterstrateof15%,whichplancouldhelplowerthecost?A=500+(200/1+15%)+(200/1.15*1.15)=825B=100+(300/1+15%)+(600/1.15*1.15)=815,DeterminantsofInterestRates,ClassicInterestRateTheoryLiquidityPreferenceTheTheoryofLoadableFundsOtherfactorsincludingeconomycycle,fiscalpolicies,governmentpower,古典学派的真实利率理论认为，工资和物价的变化可以自动促进充分就业，其他因素如货币对实务经济的影响不存在，经济完全可以完成自动均衡，在此条件下，利率只有投资和储蓄决定。,ClassicInterestRateTheory,Itbelievesthatinterestratesaredeterminedbyinteractionofsavingsandinvestment.Investmentisnegativerelatedtointerestrates.Savingsispositiverelatedtointerestrates.,LiquidityPreference,Liquiditypreferenceinmacroeconomictheoryreferstothedemandformoney,consideredasliquidity.TheconceptwasfirstdevelopedbyJohnMaynardKeynesinhisbookTheGeneralTheoryofEmployment,InterestandMoney(1936)toexplaindeterminationoftheinterestratebythesupplyanddemandformoney.,凯恩斯认为，人们对收入有两个抉择，一是在总收入中确定消费与储蓄的比例，即现在消费还是未来消费；二是在储蓄总量确定后，具体储蓄形成的选择，即流动性偏好选择。,LiquidityPreference,AccordingtoKeynes,demandforliquidityisdeterminedbythreemotives:Thetransactionsmotive:peopleprefertohaveliquiditytoassurebasicaltransactions,fortheirincomeisnotconstantlyavailable.Theamountofliquiditydemandedisdeterminedbythelevelofincome:thehigherincome,themoremoneydemandedforcarryingoutincreasedspending.,LiquidityPreference,Theprecautionarymotive:peopleprefertohaveliquidityinthecaseofsocialunexpectedproblemsthatneedunusualcosts.Theamountofmoneydemandedalsogrowswiththeincome.,LiquidityPreference,Speculativemotive:peopleretainliquiditytospeculatethatbondpriceswillfall.Whentheinterestratedecreases,peopledemandmoremoney,toholduntiltheinterestrateincreases,whichwoulddrivedownthepriceofanexistingbondtokeepitsyieldinlinewiththeinterestrate.Thus,thelowertheinterestrate,themoreamountofmoneydemanded(andviceversa).,LiquidityPreference,利率取决于货币供求数量，而货币需求又取决于人们的流动性偏好。人们对货币的流动性偏好大，则愿意持有的货币就多，货币的需求大于货币的供给，利率就上升，否则就下降。因此，利率是由流动性偏好和货币供给共同决定的。,LiquidityPreference,当一定时期的利率水平降低到一定低点时，人们就会产生强烈的利率会上升而有价证券价格会下跌的预期，从而使得货币需求尤其是投机动机所形成的货币需求弹性无穷大，增加的货币都会被人们储存起来，而陷入“流动性陷阱”。,TheTheoryofLoadableFunds,Itstatesthatinterestratesaredecidedbydemandandsupplyofloadablefunds,insteadofsavingsandinvestment.Theinterestratesareparamountimportantinthisprocessforthefollowingreasons:1.becauseitistherewardforlendingandthecostofborrowing,theninfluencesthebehaviorofnetborrowersandlenders;2.thisbehavioralsocounteractstheinterestrate.,TheTheoryofLoadableFunds,Thedemandforloadablefundsoriginatesfromthehousehold,business,government,andforeignnetborrowerswhoborrowbecausetheyarespendingmorethantheircurrentincome.Thedownward-slopingdemandcurveindicatesthatnetborrowersarewillingtoborrowmoreatlowerinterestrate.,TheTheoryofLoadableFunds,Thetotalsupplyofloadablefundsoriginatesfromtwobasicsources:1.thehousehold,business,government,andforeignnetlenderswhoarepreparedtolendbecausetheyarespendinglessthantheircurrentincome;2.thecentralbank,which,initsongoingattemptstomanagetheeconomysperformance,suppliesreservestothefinancialsystemthatleadtoincreasesinthegrowthrateofmoney.,FunctionsofInterestRate,InfluenceonMoneyDemandInfluenceonMoneySupplyInfluenceonCentralBankMonetaryPoliciesInfluenceonExchangeRateInfluenceonthePriceofFinancialAssets,Moneymultiplier,Themostcommonmechanismusedtomeasurethisincreaseinthemoneysupplyistypicallycalledthemoneymultiplier.Itcalculatesthemaximumamountofmoneythataninitialdepositcanbeexpandedtowithagivenreserveratio.,货币供给扩张的倍数。中央银行的初始货币提供量与社会货币最终形成量之间存在数倍扩张（或收缩）的效果或反应，即乘数效应。先假设最低准备金率是20%，也就是说当银行得到100元的存款时它必须留存20元，只能贷出80元.其次假设银行会放足80元。现在有A往银行里存了100元，银行再将其中的80元放贷给B，如果B把贷来的80元又全部存入银行，银行再将其中的64原贷给了C，C又把64元存入银行，银行再向D贷出51.2元.依此类推，央行最先向市场投放了100元，市场上最后多的货币会是100+80+64+51.2+.解这个数列的值是500,其实就是100*（1/0.2）=500也就是实际的货币投放量。这里的1/0.2就是货币乘数也就是1除以法定准备金率。,完整的货币（政策）乘数的计算公式是：k=（Rc+1）/(Rd+Re+Rc)。其中Rd、Re、Rc分别代表法定准备率、超额准备率和现金在存款中的比率。,Thinkabout,ComparingTreasureBillandCorporateBondwithsameterm,whichonesinterestrateishigher?,T-Bill:AnegotiabledebtobligationissuedbytheU.S.governmentandbackedbyitsfullfaithandcredit,havingamaturityofoneyearorless.Exemptfromstateandlocaltaxes.CorporationBond:Atypeofbondissuedbyacorporation,Inoursupplyanddemandanalysisofinterest-ratebehaviorinprevioussection,weexaminedthedeterminationofjustoneinterestrate.Yetwesawearlierthatthereareenormousnumbersofbondsonwhichtheinterestratescananddodiffer.,Wefirstlookatwhybondswiththesametermtomaturityhavedifferentinterestrates.Therelationshipamongtheseinterestratesiscalledtheriskstructureofinterestrates,althoughrisk,liquidity,andincometaxrulesallplayaroleindeterminingtheriskstructure.,Abondstermtomaturityalsoaffectsitsinterestrate,andtherelationshipamonginterestratesonbondswithdifferenttermstomaturityiscalledthetermstructureofinterestrates.Inthissectionweexaminehowriskandtermstructurecausefluctuationsininterestratesrelativetooneanotherandlookatanumberoftheoriesthatexplainthesefluctuations.,StructureofInterestRate,RiskStructureDefaultRiskItoccurswhentheissuerofthebondisunableorunwillingtomakeinterestpaymentswhenpromisedorpayoffthefacevaluewhenthebondmatures,Acorporationsufferingbiglosses,suchasChryslerCorporationdidinthe1970s,mightbemorelikelytosuspendinterestpaymentsonitsbonds.Thedefaultriskonitsbondswouldthereforebequitehigh.,Bycontrast,U.S.Treasurybondshaveusuallybeenconsideredtohavenodefaultriskbecausethefederalgovernmentcanalwaysincreasetaxestopayoffitsobligations.Bondslikethesewithnodefaultriskarecalleddefault-freebonds.,StructureofInterestRate,RiskPremiumThespreadbetweentheinterestratesonbondswithdefaultriskanddefault-freebonds.Itindicateshowmuchadditionalinterestpeoplemustearninordertobewillingtoholdthatriskybond.Abondwithdefaultriskalwayshasapositiveriskpremiumandthehigherthedefaultriskis,thelargertheriskpremiumwillbe.,StructureofInterestRate,Becausedefaultriskissoimportanttothesizeoftheriskpremium,purchasersofbondsneedtoknowwhetheracorporationislikelytodefaultonitsbonds.Thisinformationisprovidedbycredit-ratingagencies,investmentadvisoryfirmsthatratethequalityofcorporateandmunicipalbondsintermsoftheprobabilitydefault.,StructureofInterestRate,LiquidityRiskAliquida