Chapter 4 Exchange-Rate Systems
International Finance_Chapter4
The effect of a higher domestic growth rate (current account) 较高国内经济增长率的效应（经常账户）
If growth rate of domestic income > growth rate of foreign income (国内收
汇率和经常账户没有紧密的联系。 e.g., 1981-1985, the US dollar appreciated while the current account was dipping further into the red.
Rapid monetary expansion leads to rapid currency depreciation. (Hyperinflation)
对外汇的需求)
A fall in the exchange rate(汇率下降)
Arbitrage in the FX Market 即期外汇市场上的套汇
Arbitrage is the simultaneous purchase and sale of currencies to capitalise on anomalies in quoted exchange rates.
Chapter 4
Exchange Rate Determination and Related Issues 汇率的决定及相关问题
SomeThe exchange rate follows approximately a random walk with little or no drift.
5
The Effect of a Higher Domestic Inflation Rate 较高国内通货膨胀率的效应
国际贸易实务课后习题
Chapter 1 International Trade1.What are the reasons for international trade?There are three main reasons: resource reasons, economic reasons, and political reasons. The resource reasons refer to the uneven distribution of resources such as natural resources, capital, and labor. The economic reasons are explained by the principal of absolute advantage and the principal of comparative advantage. Besides, nations are motivated to trade or not to trade with each other by international and domestic political needs.2.What is the principal of comparative advantage?Created by David Ricardo, the principal of comparative advantage is a basic theory for specialization and trade which says trade will benefit both nations provided only that their relative costs, that is, the ratios of their real costs measured by labor-hour or another commodity, are different for two or more commodities. In other words, trade depends on differences in comparative cost or opportunity cost, and one nation can profitably trade with another even though its real costs are higher (lower) in every commodity.3.What are the benefits of international trade?The benefits of international trade include cheaper goods, more choices of goods, wider market for domestic producers, and the growth of domestic and world economy.4. Why does trade protectionism still exist despite the benefits of international trade?Trade protectionism exists for economic and political reasons. Nations want to protect their infant industries and jobs from foreign competition, to maintain balance of payment, and not to support their foes.5.Want are some of the forms of trade restrictions?Trade restrictions take the forms of tariff barriers and non-tariff barriers.6.What is a tariff barrier and what is a non-tariff barrier?A tariff barrier is a direct monetary burden to discourage trade in which a duty or fee is levied on goods being imported into (or exported out of) a country. A non-tariff barrier, on the other hand, is not directly a monetary burden though it often costs more time and money. Non-tariff barriers include quota, license, foreign exchange control, technical standards, and regulations, etc.Terms1. A tariff: is a duty or fee that is levied on goods being imported into (or exported out of) acountry.2.Surtax: is an additional tax. It may also be temporary and discriminatory. In internationaltrade, import surtax is often collected to cope with international payment difficulties and to prevent dumping.3.Anti-dumping duty: is a fee that is collected by the importing country when it believes thatthe exporting country is selling a significant amount goods to the importing country at prices much lower than in the exporting country.4.Specific duty: is a tax of a certain sum assessed and collected on an article without referenceto its value or market.5.Ad valorem duty: is a tax which is graded according to the cost, or market value, of thearticle taxed.6. A quota: is a quantitative restriction or an upper limit in terms of physical quantity or value.7.An import license: is a permit for import issued by the government to control the import ofgoods.8.Foreign exchange control: means various forms of restriction imposed by a government onthe purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.Chapter 2 Terms of Delivery1.What are the key issues that a contract must spell out clearly?Seller’s and buyer’s responsibilities and associated costsTime and place of deliveryDocuments and expensesTitle to the goods2.Why are Incoterms created?Incoterms are created to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.3.How are the terms structured in Incoterms?The terms are grouped in four basically different categories: E-term, F-terms, C-terms, and D-terms. E-term requires the seller to make the goods available to the buyer usually at the seller’s own premises. F-terms require the seller to deliver the goods to a carrier appointed and paid by the buyer. C-terms require the seller to contract and pay for carriage without assuming the risk of loss of or damage to the goods or additional costs due to events occurring after shipment and dispatch. D-terms require the seller to bear all costs and risks needed to bring the goods to the place of destination.4.Do you have to use Incoterms in every transaction? Why or why not?No, sellers and buyers don’t need to use Incoterms in their transaction because Incoterms are created only to provide an option, not an obligation.5.What should be considered in the choice of terms of delivery?Transport capacityCustomer’s locationFreight rateLoading/unloading facilities and local port customRisks in transitChapter 3 Cargo Packaging, Stowage & Marking1.Generally speaking, what are the main reasons for cargo packaging?Generally speaking, there are four main reasons for cargo packaging:a.protective function that essentially involves protecting the contents from the environment andvice versa;b.loading and transport function that requires proper packaging design for easy handling andspace-saving transportationc.stowage function that facilitates stowage and distribution; andd.promotion function that helps generate product awareness and sales2.The protective function of packaging essentially involves protecting the contents fromthe environment. Is this statement true or false and why?This statement is only partially true because the protective function of packaging involves protecting people and the environment, not only the contents, particularly for hazardous materials.3.What is the most efficient method of handling general cargo?The most efficient method of handling general cargo is to make up cargo unit.4.What are the main factors influencing types of cargo packaging?The main factors influencing types of cargo packaging are:a.nature of cargo;b.transport;c.Customs and statutory requirements;d.Insurance acceptance conditions;e.Cost; andf.Ease of handling and stowage5.What should be considered in the stowage of cargo?The following should be considered in the stowage of cargo:a.observation of weight limitations and distributions;b.prevention of damage to transport vehicle;c.best use of available deadweight or cubic capacity to minimize the broken stowage;d.avoidance of mixing incompatible cargo;e.plan for ease of unloading6.What purposes does correct and complete marking serve?Correct and complete marking of packages helps prevent incorrect handling, accidents, incorrect delivery, losses of weight and volume and Customs fines7.What are the main types of marks?The main types of marks include shipping marks, information marks, indicative marks and warning marks.8.What are the marking requirements?The marking requirements are internationality, visibility, legibility and indelibilityChapter 4 Transport1.What are the key differences between liners and tramps?A liner operates over a regular route according to an advertised time-table but a tramp does not operate this way. Instead, a tramp is a vessel hired to pick up cargo from almost any port and go directly to the port of destination.2.What does the abbreviation FIO stand for? What does it mean?FIO stands for “free in and out”, which means that the charterer of a vessel, not the ship operator, is responsible for the costs of loading and unloading.3.What key purposes does a B/L serve?A B/L serves three key purposes. First, it is evidence that a valid contract of carriage exists between the carrier and the shipper, and it may incorporate the full terms of the contract between them. Second, it is a receipt signed by the carrier confirming whether goods matching the contract description have been received from the shipper in good condition. Third, it is also a document of title, creating ownership of the goods shipped.4.What should a clause of shipment include?A clause of shipment should include time of shipment, port of shipment and port of destination, advice of shipment, partial shipment and transshipment.5.What is Air Waybill and what is the key difference between the document and an OceanB/L?An air waybill is a transport document issued by airlines or air cargo companies or their agents. The key difference between this document and an ocean B/L is that air waybill is not a title document. As a straight waybill, an air waybill is not transferrable or negotiable and a shipper does not lose his ownership of the cargo by handing the air waybill to the airline. However, as the buyer is named the consignee on the waybill and he/she can claim the consignment from the carrier by simply showing proof of identity.6.What is international multimodal transport?International multimodal transport is the carriage of goods by at least two different modes of transport on the basis of a multimodal transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country.7.What are the general considerations in cargo transport?Reliability, speed and frequency, and cost.Chapter 5 Foreign exchange rate & Contract formation- Offer & Acceptance1.How is the exchange rate between any two currencies expressed?There are two ways to express the exchange rate between any two currencies, i.e., the price of Currency A can be quoted in terms of Currency B or vice versa. Depending on whether home currency is used to express the price of foreign currencies or foreign countries are used to express the price of home currency, we have direct quotation and indirect quotation.2.How many rates does a bank normally quote?Two, a buying (bid) rate and a selling（ask）rate.3.Why is exchange rate an important issue for international traders?While the exchange rates between currencies float, payment is normally made sometime after the contract is concluded. The final earnings in the home currency (if the contract currency is a foreign currency) will only be known with the prevailing exchange rate at the time the payment is made. A favorable exchange rate will give the exporter more home currency. On the other hand, an adverse movement of the exchange rates will bring him a loss in terms of home currency.4.How can we manage the exchange rate risks (foreign exchange risks)?There are a number of choices: choosing the right currency for a transaction, booking a forward contract, and using other products that banks offer.5.If you intend to make your offer indefinite, what can you do to avoid misinterpretation?If an offerer wants to make an offer indefinite, he should make clear reservations to avoid misinterpretation.6.How can you terminate an offer?An offer can be terminated by:The party offering may revoke the offer if no consideration has been given.The offer may lapse (either after a specified time, or it may just become stale).Offer may come to an end after a stipulated event occurs or does not occur.Offer may lapse on death of the party offeringOffer is killed by a counter-offer.7.Who can accept an offer?Only the offeree can accept an offer.8.What does acceptance mean to a contract?Since an acceptance indicates assent to an offer, it validates the contract and means that boththe offerer and the offeree will be bound by the terms and conditions in the offer.9.What is a counter-offer?A counter-offer is either the office’s proposal of a new set of terms for the transaction or his conditional acceptance by making actual, material changes in the offer.1.Foreign exchange: is the currency of any foreign country which is the authorized instrumentof settlement and the basis for record keeping in that country.2.Like any other commodities, a foreign exchange has a price, which is expressed in anothercurrency. Exchange rate is the price relationship between the currencies of two countries or the price of one currency in terms of the other.3.Offer rate（of foreign exchange）:is the price at which a bank is willing to sell foreignexchange to its customers4. A definite offer:is one that clearly expresses the offerer’s willingness in concluding atransaction by providing complete and clear information for the deal. Normally it includes all the necessary items for a transaction, specifies the time by which the offer is valid and the time the acceptance must be received, and uses the phrase “offer firm” meaning that the offer is made without reservations.5.An acceptance: is a statement made by the offeree indicating assent to an offer.。
国际商务英语阅读教程(第四版)-期末复习
Unit 1~2Mercantilism 重商主义 Neomeicantilist 新重商主义者Trade surplus 贸易顺差Quota and tariff 配额和关税Government intervention 政府干预Zero-sum game 零和博弈Positive-sum game 常和博弈The theory of absolute advantage 绝对优势理论The theory of comparative advantage 比较优势理论Factor endowments 要素禀赋理论Product life cycle 产品生命周期（+theory ……理论）Economies of scale 规模经济Diminishing returns 收益递减规律Green revolution 绿色革命Voluntary restriction 自动出口限制Deposit 佣金First mover advantage 先占优势Barrier to entry 进入(市场)壁垒Porter’s diamond theory 波特的钻石理论National competitive advantage 国家竞争优势The department of commerce 商务部Letter of credit 信用证Draft /bill of exchange 汇票bill of lading B/L 提单Sight draft 即期汇票Time draft 远期汇票Banker ‘s acceptance 银行承兑（+bill …汇票）Trade acceptance 商业承兑汇票Countertrade 对等贸易Barter 易货贸易Switch trading 转手贸易Offset 抵消Counter purchase 互购贸易Compensation trade 补偿贸易Mercantilism suggests that it is in a country’s best interest to maintain a trade surplus -- to export more than it imports（重商主义就是保持贸易顺差以实现一国的最大利益---出口超过进口）Mercantilism advocates government intervention(介入) to achieve a surplus in the balance of trade （重商主义主张政府介入以便实现对外贸易顺差）It views trade as a zero-sum game - one in which a gain by one country results in a loss by another （将贸易看成零和博弈，一个国家收益一个国家受损）Absolute Advantage 绝对优势Adam Smith argued that a country has an absolute advantage in the production of a product when it is more efficient than any other country in producing it亚当斯密认为一个国家生产一种商品比其他任何国家效率都高时存在绝对优势According to Smith, countries should specialize in the production of goods for which they have an absolute advantage and then trade these goods for the goods produced by other countries 按照亚当斯密的说法，各国应该专门生产具有绝对优势的商品，然后用他们交换其他国家生产的商品The Benefit（好处） of Absolute Advantage and Free TradeThe Principle for International Division of Labor–Absolute Advantage 国际分工的原则---绝对优势The Consequence（结果） of Division of Labor and Free Trade 分工的结果和自由贸易1. To Production: the Flow of the Factor of Production 生产要素的流动； the Efficiency of Factor Distribution 要素分配效率；the Quantity of Production 产品质量。
国际金融financetestbank4教学文案
国际金融Fi na n c e Te s t Ba nk4Chapter 4—Exchange Rate Determination加息会降低通货膨胀本国货币就增值涨价了，出口就会减少进口就会增加1. The value of the Australian dollar (A$) today is $0.73. Yesterday, thevalue of the Australian dollar was $0.69. The Australian dollar ____ by ____%.a. depreciated; 5.80b. depreciated; 4.00c. appreciated; 5.80d. appreciated; 4.00ANS: CSOLUTION: ($0.73 $0.69)/$0.69 =5.80%PTS: 12. If a currency's spot rate market is ____, its exchange rate is likely to be____ to a single large purchase or sale transaction.a. liquid; highly sensitiveb. illiquid; insensitivec. illiquid; highly sensitived. none of the above.ANS: C PTS: 13. ____ is not a factor that causes currency supply and demand schedulesto change.a. Relative inflation ratesb. Relative interest ratesc. Relative income levelsd. Expectationse. All of the above are factorsthat cause currency supplyand demand schedules tochange.ANS: E PTS: 14. A large increase in the income level in Mexico along with no growth inthe U.S. income level is normally expected to cause (assuming nochange in interest rates or other factors) a(n) ____ in Mexican demand for U.S. goods, and the Mexican peso should ____.a. increase; appreciateb. increase; depreciatec. decrease; depreciated. decrease; appreciateANS: B PTS: 15. An increase in U.S. interest rates relative to German interest rateswould likely ____ the U.S. demand for euros and ____ the supply of euros for sale.a. reduce; increaseb. increase; reducec. reduce; reduced. increase; increaseANS: A PTS: 16. Investors from Germany, the United States, and the U.K. frequentlyinvest in each other based on prevailing interest rates. If Britishinterest rates increase, German investors are likely to buy ____ dollar-denominated securities, and the euro is likely to ____ relative to the dollar.a. fewer; depreciateb. fewer; appreciatec. more; depreciated. more; appreciateANS: A PTS: 17. When the "real" interest rate is relatively low in a given country, thenthe currency of that country is typically expected to be:a. weak, since the country'squoted interest rate would behigh relative to the inflationrate.b. strong, since the country'squoted interest rate would below relative to the inflationrate.c. strong, since the country'squoted interest rate would behigh relative to the inflationrate.d. weak, since the country'squoted interest rate would below relative to the inflationrate.ANS: D PTS: 18. Assume that the inflation rate becomes much higher in the U.K.relative to the U.S. This will place ____ pressure on the value of theBritish pound. Also, assume that interest rates in the U.K. begin torise relative to interest rates in the U.S. The change in interest rateswill place ____ pressure on the value of the British pound.a. upward; downwardb. upward; upwardc. downward; upwardd. downward; downwardANS: C PTS: 19. In general, when speculating on exchange rate movements, thespeculator will borrow the currency that is expected to appreciate andinvest in the country whose currency is expected to depreciate.a. Trueb. FalseANS: F PTS: 110. Baylor Bank believes the New Zealand dollar will appreciate over thenext five days from $.48 to $.50. The following annual interest ratesapply:Currency Lending Rate Borrowing Rate Dollars 7.10% 7.50%6.80%7.25%New Zealand dollar(NZ$)Baylor Bank has the capacity to borrow either NZ$10 million or $5million. If Baylor Bank's forecast is correct, what will its dollar profitbe from speculation over the five-day period (assuming it does not useany of its existing consumer deposits to capitalize on its expectations)?a. $521,325.b. $500,520.c. $104,262.d. $413,419.e. $208,044.ANS: ESOLUTION:1. Borrow $5 million.2. Convert to NZ$:$5,000,000/$.48 =NZ$10,416,667.3. Invest the NZ$ at anannualized rate of 6.80% overfive days.NZ$10,416,667 [1+ 6.80% (5/360)]= NZ$10,426,5054. Convert the NZ$ back todollars:NZ$10,426,505$.50 = $5,213,2525. Repay the dollars borrowed.The repayment amount is:$5,000,000 [1 +7.5% (5/360)]= $5,000,000[1.00104]= $5,005,2086. After repaying the loan, theremaining dollar profit is:$5,213,252$5,005,208 = $208,044 PTS: 111. Assume the following information regarding U.S. and Europeanannualized interest rates:Currency Lending Rate Borrowing Rate U.S. Dollar ($) 6.73% 7.20%Eu ro (?) 6.80% 7.28%Trensor Bank can borrow either $20 million or ?20 million. Thecurrent spot rate of the euro is $1.13. Furthermore, Trensor Bankexpects the spot rate of the euro to be $1.10 in 90 days. What isTrensor Bank's dollar profit from speculating if the spot rate of theeuro is indeed $1.10 in 90 days?a. $579,845.b. $583,800.c. $588,200.d. $584,245.e. $980,245.ANS: ASOLUTION:1. Borrow ?20 million.2. Convert the ?20 million to?20,000,000 $1.13 =$22,600,000.3. Invest the $22,600,000 at anannualized rate of 6.73% for90 days.$22,600,000 [1 +6.73% (90/360)]= $22,980,2454. Determine euros owed:?20,000,000 [1 + 7.28%(90/360)] = ?20,364,000.5. Determine dollars needed torepay euro loan:?20,364,000 $1.10 =$22,400,400.6. The dollar profit is$22,980,245 $22,400,400= $579,845.PTS: 112. The equilibrium exchange rate of pounds is $1.70. At an exchangerate of $1.72 per pound:a. U.S. demand for pounds wouldexceed the supply of poundsfor sale and there would be ashortage of pounds in theforeign exchange market.b. U.S. demand for pounds wouldbe less than the supply ofpounds for sale and therewould be a shortage of poundsin the foreign exchangemarket.c. U.S. demand for pounds wouldexceed the supply of poundsfor sale and there would be asurplus of pounds in theforeign exchange market.d. U.S. demand for pounds wouldbe less than the supply ofpounds for sale and therewould be a surplus of poundsin the foreign exchangemarket.e. U.S. demand for pounds wouldbe equal to the supply ofpounds for sale and therewould be a shortage of poundsin the foreign exchangemarket.ANS: D PTS: 113. Assume that Swiss investors have francs available to invest insecurities, and they initially view U.S. and British interest rates asequally attractive. Now assume that U.S. interest rates increase whileBritish interest rates stay the same. This would likely cause:a. the Swiss demand for dollarsto decrease and the dollar willdepreciate against the pound.b. the Swiss demand for dollarsto increase and the dollar willdepreciate against the Swissfranc.c. the Swiss demand for dollarsto increase and the dollar willappreciate against the Swissfranc.d. the Swiss demand for dollarsto decrease and the dollar willappreciate against the pound.ANS: C PTS: 114. The real interest rate adjusts the nominal interest rate for:a. exchange rate movements.b. income growth.c. inflation.d. government controls.e. none of the aboveANS: C PTS: 115. If U.S. inflation suddenly increased while European inflation stayed thesame, there would be:a. an increased U.S. demand foreuros and an increased supplyof euros for sale.b. a decreased U.S. demand foreuros and an increased supplyof euros for sale.c. a decreased U.S. demand foreuros and a decreased supplyof euros for sale.d. an increased U.S. demand foreuros and a decreased supplyof euros for sale.ANS: D PTS: 116. If inflation in New Zealand suddenly increased while U.S. inflationstayed the same, there would be:a. an inward shift in the demandschedule for NZ$ and anoutward shift in the supplyschedule for NZ$.b. an outward shift in thedemand schedule for NZ$ andan inward shift in the supplyschedule for NZ$.c. an outward shift in thedemand schedule for NZ$ andan outward shift in the supplyschedule for NZ$.d. an inward shift in the demandschedule for NZ$ and aninward shift in the supplyschedule for NZ$.ANS: A PTS: 117. If the U.S. and Japan engage in substantial financial flows but littletrade, ____ directly influences their exchange rate the most. If the U.S.and Switzerland engage in much trade but little financial flows, ____directly influences their exchange rate the most.a. interest rate differentials;interest rate differentialsb. inflation and interest ratedifferentials; interest ratedifferentialsc. income and interest ratedifferentials; inflationdifferentialsd. interest rate differentials;inflation and incomedifferentialse. inflation and incomedifferentials; interest ratedifferentialsANS: D PTS: 118. If inflation increases substantially in Australia while U.S. inflationremains unchanged, this is expected to place ____ pressure on the value of the Australian dollar with respect to the U.S. dollar.a. upwardb. downwardc. either upward or downward(depending on the degree ofthe increase in Australianinflation)d. none of the above; there willbe no impactANS: B PTS: 119. Assume that British corporations begin to purchase more suppliesfrom the U.S. as a result of several labor strikes by British suppliers.This action reflects:a. an increased demand forBritish pounds.b. a decrease in the demand forBritish pounds.c. an increase in the supply ofBritish pounds for sale.d. a decrease in the supply ofBritish pounds for sale.ANS: C PTS: 120. The exchange rates of smaller countries are very stable because themarket for their currency is very liquid.a. Trueb. FalseANS: F PTS: 121. The phrase "the dollar was mixed in trading" means that:a. the dollar was strong in someperiods and weak in otherperiods over the last month.b. the volume of trading wasvery high in some periods andlow in other periods.c. the dollar was involved insome currency transactions,but not others.d. the dollar strengthenedagainst some currencies andweakened against others.ANS: D PTS: 122. Assume that the U.S. places a strict quota on goods imported fromChile and that Chile does not retaliate. Holding other factors constant,this event should immediately cause the U.S. demand for Chilean pesos to ____ and the value of the peso to ____.a. increase; increaseb. increase; declinec. decline; declined. decline; increaseANS: C PTS: 123. Any event that increases the U.S. demand for euros should result ina(n) ____ in the value of the euro with respect to ____, other thingsbeing equal.a. increase; U.S. dollarb. increase; nondollar currenciesc. decrease; nondollar currenciesd. decrease; U.S. dollarANS: A PTS: 124. Any event that reduces the U.S. demand for Japanese yen shouldresult in a(n) ____ in the value of the Japanese yen with respect to ____, other things being equal.a. increase; U.S. dollarb. increase; nondollar currenciesc. decrease; nondollar currenciesd. decrease; U.S. dollarANS: D PTS: 125. Any event that increases the supply of British pounds to be exchangedfor U.S. dollars should result in a(n) ____ in the value of the Britishpound with respect to ____, other things being equal.a. increase; U.S. dollarb. increase; nondollar currenciesc. decrease; nondollar currenciesd. decrease; U.S. dollarANS: D PTS: 126. Any event that reduces the supply of Swiss francs to be exchanged forU.S. dollars should result in a(n) ____ in the value of the Swiss francwith respect to ____, other things being equal.a. increase; U.S. dollarb. increase; nondollar currenciesc. decrease; nondollar currenciesd. decrease; U.S. dollarANS: A PTS: 127. Assume that the U.S. experiences a significant decline in income, whileJapan's income remains steady. This event should place ____ pressure on the value of the Japanese yen, other things being equal. (Assumethat interest rates and other factors are not affected.)a. upwardb. downwardc. nod. upward and downward(offsetting)ANS: B PTS: 128. News of a potential surge in U.S. inflation and zero Chilean inflationplaces ____ pressure on the value of the Chilean peso. The pressure will occur ____.a. upward; only after the U.S.inflation surgesb. downward; only after the U.S.inflation surgesc. upward; immediatelyd. downward; immediatelyANS: C PTS: 129. Assume that Canada places a strict quota on goods imported from theU.S. and that the U.S. does not retaliate. Holding other factorsconstant, this event should immediately cause the supply of Canadian dollars to be exchanged for U.S. dollars to ____ and the value of theCanadian dollar to ____.a. increase; increaseb. increase; declinec. decline; declined. decline; increaseANS: D PTS: 130. Assume that Japan places a strict quota on goods imported from theU.S. and the U.S. places a strict quota on goods imported from Japan.This event should immediately cause the U.S. demand for Japaneseyen to ____, and the supply of Japanese yen to be exchanged for U.S.dollars to ____.a. increase; increaseb. increase; declinec. decline; declined. decline; increaseANS: C PTS: 131. Which of the following is not mentioned in the text as a factoraffecting exchange rates?a. relative interest rates.b. relative inflation rates.c. government controls.d. expectations.e. all of the above are mentionedin the text as factors affectingexchange rates.ANS: E PTS: 132. If a country experiences high inflation relative to the U.S., its exportsto the U.S. should ____, its imports should ____, and there is ____pressure on its currency's equilibrium value.a. decrease; increase; upwardb. decrease; decrease; upwardc. increase; decrease; downwardd. decrease; increase; downwarde. increase; decrease; upwardANS: D PTS: 133. If a country experiences an increase in interest rates relative to U.S.interest rates, the inflow of U.S. funds to purchase its securities should____, the outflow of its funds to purchase U.S. securities should ____,and there is ____ pressure on its currency's equilibrium value.a. increase; decrease; downwardb. decrease; increase; upwardc. increase; decrease; upwardd. decrease; increase; downwarde. increase; increase; upwardANS: C PTS: 134. An increase in U.S. inflation relative to Singapore inflation placesupward pressure on the Singapore dollar.a. Trueb. FalseANS: T PTS: 135. When expecting a foreign currency to depreciate, a possible way tospeculate on this movement is to borrow dollars, convert the proceedsto the foreign currency, lend in the foreign country, and use theproceeds from this investment to repay the dollar loan.a. Trueb. FalseANS: F PTS: 136. Since supply and demand for a currency are constant (primarily dueto government intervention), currency values seldom fluctuate.a. Trueb. FalseANS: F PTS: 137. Relatively high Japanese inflation may result in an increase in thesupply of yen for sale and a reduction in the demand for yen.a. Trueb. FalseANS: T PTS: 138. The main effect of interest rate movements on exchange rates isthrough their effect on international trade.a. Trueb. FalseANS: F PTS: 139. Country X frequently engages in trade flows with the U.S. (such asimports and exports). Country Y frequently engages in capital flowswith the U.S. (such as financial investments). Everything else heldconstant, an increase in U.S. interest rates would affect the exchange rate of Country X's currency more than the exchange rate of Country Y's currency.a. Trueb. FalseANS: F PTS: 140. Increases in relative income in one country vs. another result in anincrease in the first country's currency value.a. Trueb. False41. Trade-related foreign exchange transactions are more responsive tonews than financial flow transactions.a. Trueb. FalseANS: F PTS: 142. Signals regarding future actions of market participants in the foreignexchange market sometimes result in overreactions.a. Trueb. FalseANS: T PTS: 143. The markets that have a smaller amount of foreign exchange tradingfor speculatory purposes than for trade purposes will likely experience more volatility than those where trade flows play a larger role.a. Trueb. FalseANS: T PTS: 144. Liquidity of a currency can affect the extent to which speculation canimpact the currency's value.a. Trueb. False45. Forecasting a currency's future value is difficult, because it is difficultto identify how the factors affecting the currency value will change,and how they will interact to impact the currency's value.a. Trueb. FalseANS: T PTS: 146. The standard deviation should be applied to values rather thanpercentage movements when comparing volatility among currencies.a. Trueb. FalseANS: F PTS: 147. Movements of foreign currencies tend to be more volatile for shortertime horizons.a. Trueb. FalseANS: F PTS: 148. If a currency's spot market is ____, its exchange rate is likely to be ____to a single large purchase or sale transaction.a. liquid; highly sensitiveb. illiquid; insensitivec. liquid; insensitived. none of the aboveANS: C PTS: 149. The value of euro was $1.30 last week. During last week the eurodepreciated by 5%. What is the value of euro today?a. $1.365b. $1.235c. $1.330d. $1.30ANS: BSOLUTION: $1.3 (1 .05) = $1.235 PTS: 150. Government controls can only affect the supply of a given currencyfor sale and not the demand.a. Trueb. FalseANS: F PTS: 151. If one foreign currency will appreciate against the dollar, then allforeign currencies will appreciate against the dollar but by differentdegrees.a. Trueb. FalseANS: F PTS: 152. Assume that the income levels in U.K. start to rise, while U.S. incomelevels remain unchanged. This will place ____ pressure on the value of British pound. Also, assume that U.S. interest rates rise, while theBritish pound remains unchanged. This will place ____ pressure on the value of British pound.a. downward; downwardb. upward; downwardc. upward; upwardd. downward; upwardANS: D PTS: 153. If the Fed announces that it will decrease the U.S. interest rates, andEuropean Central Bank takes no action, then the value of euro will____ against the value of U.S. dollar. The Fed's action is called ____intervention.a. appreciate; directb. depreciate; directc. appreciate; indirectd. depreciate; indirectANS: C PTS: 154. Assume that the total value of investment transactions between U.S.and Mexico is minimal. Also assume that total dollar value of tradetransactions between these two countries is very large. Now assumethat Mexico's inflation has suddenly increased, and Mexican interestrates have suddenly increased. Overall, this would put ____ pressure on the value of Mexican peso. The inflation effect should be ____pronounced than the interest rate effect.a. downward; moreb. upward; morec. downward; lessd. upward; lessANS: A PTS: 155. If U.S. experiences a sudden surge in inflation and surge in interestrates while Japanese inflation and interest rates remain unchanged,the value of Japanese yen will ____ against the U.S. dollar.a. appreciateb. depreciatec. remain unchangedd. cannot be determined fromthe information provided.ANS: D PTS: 156. If the Japanese yen is expected to appreciate against the U.S. dollarand interest rates in the U.S. and Japan are similar, banks may tryspeculating on this anticipated exchange rate movement by borrowing ____ and investing in ____.a. yen; dollarsb. yen; yenc. dollars; yend. dollars; dollarsANS: C PTS: 157. British investors frequently invest in the U.S. or Italy, depending onthe prevailing interest rates. If Italian interest rates suddenly rise high above U.S. rates, the investors will ____ the supply of pounds to beexchanged for dollars and thus put ____ pressure on the value of the pound against the U.S. dollar.a. increase; downwardb. decrease; upwardc. increase; upwardd. decrease; downwardANS: B PTS: 158. The equilibrium exchange rate of the Swiss franc is $0.90. At anexchange rate $.83:a. U.S. demand for Swiss francswould exceed the supply offrancs for sale and therewould be a shortage of francsin the foreign exchangemarket.b. U.S. demand for Swiss francswould be less than the supplyof francs for sale and therewould be a shortage of francsin the foreign exchangemarket.c. U.S. demand for Swiss francswould exceed the supply offrancs for sale and therewould be a surplus of francs inthe foreign exchange market.d. U.S. demand for Swiss francswould be less than the supplyof francs for sale and therewould be a surplus of Swissfrancs in the foreign exchangemarket.ANS: A PTS: 159. Financial flow foreign exchange transactions are more responsive tonews than trade-related transactions.a. Trueb. FalseANS: T PTS: 160. Assume that the British government eliminates all controls on importsby British companies. Other things being equal, the U.S. demand forpounds would ____, the supply of pounds for sale would ____, and the equilibrium value of the pound would ____.a. increase; increase; increaseb. decrease; increase; decreasec. remain unchanged; increase;decreased. remain unchanged; increase;increaseANS: C PTS: 161. Country X frequently engages in trade flows with the U.S. (such asimports and exports). Country Y frequently engages in capital flowswith the U.S. (such as financial investments). Everything else heldconstant, an increase in U.S. inflation would affect the exchange rateof Country Y's currency more than the exchange rate of Country X'scurrency.a. Trueb. FalseANS: F PTS: 162. Assume that U.S. inflation is expected to surge in the near future. Theexpectation of surge in inflation will most likely place ____ pressure on U.S. dollar immediately.a. upwardb. downwardc. nod. cannot be determinedANS: A PTS: 163. When the Japanese yen appreciates against the U.S. dollar, this meansthat the U.S. dollar is strengthening relative to the yen.a. Trueb. FalseANS: F PTS: 164. Illiquid currencies tend to exhibit less volatile exchange ratemovements than liquid currencies.a. Trueb. FalseANS: F PTS: 165. The supply curve for a currency is downward sloping since U.S.corporations would be encouraged to purchase more foreign goodswhen the foreign currency is worth less.a. Trueb. FalseANS: F PTS: 166. Relatively high Japanese inflation may result in an increase in thesupply of yen for sale and a reduction in the demand for yen, otherthings being equal.a. Trueb. FalseANS: T PTS: 167. If the British government desires an appreciation in its currency withrespect to the U.S. dollar, it would consider intervening in the foreign exchange market by buying dollars with pounds.a. Trueb. FalseANS: F PTS: 168. Country X frequently engages in trade flows with the U.S. (such asimports and exports). Country Y frequently engages in financial flows with the U.S. (such as financial investments). Everything else heldconstant, an increase in U.S. interest rates would affect the exchange rate of Country X's currency more than the exchange rate of Country Y's currency.a. Trueb. FalseANS: F PTS: 169. Illiquid currencies tend to exhibit ____ volatile exchange ratemovements, as the equilibrium prices of their currencies adjust to ____changes in supply and demand conditions.a. less; even minorb. less; only largec. more; even minord. more; only largee. none of the aboveANS: C PTS: 170. Which of the following is not mentioned in the text as a factoraffecting exchange rates?a. Relative interest ratesb. Relative inflation ratesc. Government controlsd. Expectationse. All of the above are mentionedin the text as factors affectingexchange rates.ANS: E PTS: 171. Which of the following events would most likely result in anappreciation of the U.S. dollar?a. U.S. inflation is very high.b. The Fed indicates that it willraise U.S. interest rates.c. Future U.S. interest rates areexpected to decline.d. Japan is expected to increaseinterest rates in the nearfuture.ANS: B PTS: 172. Which of the following interactions will likely have the least effect onthe dollar's value? Assume everything else is held constant.a. A reduction in U.S. inflationaccompanied by an increase inreal U.S. interest ratesb. A reduction in U.S. inflationaccompanied by an increase innominal U.S. interest ratesc. An increase in U.S. inflationaccompanied by an increase innominal, but not real, U.S.interest ratesd. An increase in Singapore'sinflation accompanied by anincrease in real U.S. interestratese. An increase in Singapore'sinterest rates accompanied byan increase in U.S. inflation.ANS: C PTS: 173. If a country experiences high inflation relative to the U.S., its exportsto the U.S. should ____, its imports should ____, and there is ____pressure on its currency's equilibrium value.a. decrease; increase; upwardb. decrease; decrease; upwardc. increase; decrease; downwardd. decrease; increase; downwarde. increase; decrease; upwardANS: D PTS: 174. If a country experiences an increase in interest rates relative to U.S.interest rates, the inflow of U.S. funds to purchase its securities should____, the outflow of its funds to purchase U.S. securities should ____,and there is ____ pressure on its currency's equilibrium value.a. increase; decrease; downwardb. decrease; increase; upwardc. increase; decrease; upwardd. decrease; increase; downwarde. increase; increase; upward ANS: C PTS: 1。
第四章 《国际金融》PPT课件
Application of PPP
• Choosing the right initial exchange rate for a newly independent country;
• Forecasting medium- and long-term real exchange rates;
✓ 也可以理解为：汇率水平（E）和相对价格水平（ P*/ P ） 的乘积。
✓ 注意，这里的E是现实世界已知的名义汇率，区别于上面 的根据购买力计算出来的名义汇率e。
✓ 测试购买力平价偏离的程度； a. 如果绝对形式的PPP成立的话，真实汇率应该为1，
但大多时候都不等于1。 b. 如果相对形式的PPP成立的话，真实汇率应该为一
e0
P0 P0*
• 一般化为：
e1
P1 P1 *
P1P0
* *
• 也可以表示为：e *
• One country’s inflation rate can only be higher (lower) than another’s to the extent that its exchange rate depreciates (appreciates).
• There is little empirical support for absolute purchasing power parity.
– The prices of identical commodity baskets, when converted to a single currency, differ substantially across countries.
• Speculation: the activity of holding a good or security in the hope of profiting from a future rise in its price.
国际支付与结算chapter 4
Importer’s Bank
Exporter’s Bank
The seller on his own initiative asks a bank to get money from the buyer.
托收、信用证属于逆汇，即收款人主动委托银行向付款人收款。
Chapter 4 Remittance
Chapter 4 Remittance
Funds flow Chapter 4 Remittance Payment instruction Remittance Payer Payee(Beneficiary)
Remittance Importer’s Bank Exporter’s Bank
Chapter 4 Remittance
Diagram
Remitter
2.T/T receipt 1.T/T application
Beneficiary
4.Notify the beneficiary 5. Signed for payment
6. Funds
Remitting Bank
3.Cable/telex/SWIFT 7.Debit advice
Chapter 4 Remittance
3.Remittance by banker’s Demand Draft(D/D)票汇
Remitting bank draw a banker’s draft on paying bank ordering the latter to pay on demand the stated amount to the holder of the draft. 银行即期汇票
③The beneficiary must await notification from the bank concerned. 资金汇兑速度取决于邮递速度，相对较慢；银行有 机会占用客户的在途汇款资金。
《金融专业英语》习题答案
Chapter One Functions of Financial Markets 一．Translate the following sentences into Chinese.1.China’s banking industry is now supervised by the PBC and CBRC. In addition, the MOFis in charge of financial accounting and taxation part of banking regulation and management.目前中国银行业主要由中国人民银行和银监会进行监管。
此外，财政部负责银行业监管的财务会计及税收方面。
2.Currently Chinese fund management companies are engaged in the following business:securities investment fund, entrusted asset management, investment consultancy, management of national social security funds, enterprise pension funds and QDII businesses.目前中国的基金管理公司主要从事以下业务：证券投资基金业务、受托资产管理业务、投资咨询业务、社保基金管理业务、企业年金管理业务和合格境内机构投资者业务等。
3.China's economy had 10% growth rate in the years before the world financial crisisof 2008. That economic expansion resulted from big trade surpluses and full investment.Now China is seeking to move away from that growth model. The country is working to balance exports with demand at home.在2008年世界经济危机之前的那些年，中国经济增长速度曾达到10%。
国际金融Chapter 4 重要知识点
Chapter 4 重要知识点The measurement of all international economic transactions between the residents of a country and foreign residents is called the balance of payments (BOP).BOP data is also important1.An indication of pressure on a country’s foreign exchange rate2. A signal of the imposition or removal of controls in various sorts of payments3. A forecast of a country’s market potential (especially in the short run)The BOP must balance.The measurement of all international transactions in and out of a country over a year is a daunting task. Mistakes, errors, and statistical discrepancies （统计误差）will occur. The primary problem is that double-entry bookkeeping is employed in theory, but not in practice. Current, financial, and capital account entries are recorded independently of one another, not together as double-entry bookkeeping would prescribe. Thus, there will be serious discrepancies between debits and credits.Net Errors and Omissions. As previously noted, because current and financial account entries are collected and recorded separately, errors or statistical discrepancies will occur. The net errors and omissions account ensure that the BOP actually balances.The balance of payments is composed of three primary subaccounts: the current account, the financial account, and the capital account. In addition, the official reserves account tracks government currency transactions, and a fifth statistical subaccount, the net errors and omissions account, is produced to preserve the balance in the BOP.The BOP is a flow statement, summarizing all the inter- national transactions that occur across the geographic boundaries of the nation over a period of time, typically a year.The current account consists of four subcategories:Goods trade. The export and import of goods are known as the goods trade. Merchandise trade is the oldest and most traditional form of international economic activity.Services trade. The export and import of services is known as the services trade.Income. This is predominantly current income associated with investments that were made in previous periods. Additionally, wages and salaries paid to nonresident workers are also included in this category.Current transfers. The financial settlements associated with the change in ownership of real resources or financial items are called current transfers.The capital and financial accounts of the balance of payments measure all international economic transactions of financial assets.The capital account is made up of transfers of financial assets and the acquisition and disposal of nonproduced/nonfinancial assets.The financial account consists of three components: direct investment, portfolio investment, and other asset investmentsOfficial Reserves Account.The Official Reserves Account is the total reserves held by official monetary authorities within a country. These reserves are normally composed of the major currencies used in international trade and financial transactionsA nation’s balance of payments interacts with nearly all of its key macroeconomic variables. Interacts means that the balance of payments affects and is affected by such key macroeconomic factors as the following: Gross domestic product (GDP)、Exchange rate、Interest rates、Inflation ratesA nation’s GDP can be represented by the following equation: GDP = C + I + G + X - MThus, a positive current account balance (surplus) contributes directly to increasing the measure of GDP, but a negative current account balance (deficit) decreases GDP. In a dynamic (cash flow) sense, an increase or decrease in GDP contributes to the current account deficit or surplus. As GDP grows, so does disposable income and capital investment. Increased disposable income leads to more consumption, a portion of which is supplied by more imports. Increased consumption eventually leads to more capital investment.A country’s BOP can have a significant impact on the level of its exchange rate and vice versa.The effect of an imbalance in the BOP of a country works somewhat differently depending on whether that country has fixed exchange rates, floating exchange rates, or a managed exchange rate system.The overall level of a country’s interest rates compared to other countries has an impact on the financial account of the balance of payments. Relatively low real interest rates should normally stimulate an outflow of capital seeking higher interest rates in other country currencies.A country’s import and export of goods and services is affected by changes in exchange rates. The transmission mechanism is in principle quite simple: changes in exchange rates change relative prices of imports and exports, and changing prices in turn result in changes in quantities demanded through the price elasticity of demand. The J-Curve Adjustment PathIn the first period, the currency contract periodThe second period of the trade balance adjustment process is termed the pass-through period.The third and final period, the quantity adjustment period, achieves the balance of trade adjustment that is expected from a domestic currency devaluation or depreciation.。
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Classifications of Exchange Rate Systems
An economist’s classification
Floating Exchange Rate Systems
The IMF’s classification
More Flexible Systems
Limited Flexibility ห้องสมุดไป่ตู้ystems
No par value! No limits on fluctuation of exchange rate! No commitment to intervene in the forex market by central banks! Market forces determine the level of exchange rate! Balance of payment is the major factor in influencing the forex market.
adjustable pegged-rate system crawling pegs managed floating
Adjustable Pegged Rates
In a pegged exchange rate system, the home currency’s value is pegged to a foreign currency or to some unit of account, and moves in line with that currency or unit against other currencies.
----- Great risk
----- Inflation
----- Destabilizing speculation
Hybrid Exchange Rates
It combines various features of fixed and floating exchange rate in different degrees. Fluctuation bands differs among
Fixed (“pegged”) rate
Peg to a single major currency Peg to a basket of currencies Peg to gold (obsolete)
Exchange rate arrangements of IMF members, 2004
Fixed Exchange Rate Systems
Pegged systems
Exchange Rate Practices
Floating rate - market determined
Float independently Float in unison with a group of other countries Adjust according to a formula
----- High cost in balancing payments
----- Benefiting speculation
Exchange-Rate Stabilization
Involve mechanisms to Correct Deficits or Surpluses in BOP
-- However, the crawl tends to be too slow. So the currency becomes overvalued, resulting in exchange-rate crises and big devaluations (just as under adjustable peg rates). -- Establishing a fixed exchange rate is difficult in an economy with high inflation -- Frequent changes keep pegged rates from becoming unrealistic, and unannounced changes keep speculators at bay.
Flexible Exchange Rates
Under floating (Flexible) exchange rate systems, exchange rates are determined by forces of demand and supply.
Performance of Flexible Exchange Rate
Fixed Exchange Rate
Central banks pledge to maintain a preset level for the exchange rate by buying and selling currencies.
Performance of Fixed Exchange Rate
Choice of Fixed Exchange Rate
Countries choosing fixed exchange rates tend to have:
relatively small size relatively open economies harmonious inflation rates concentrated trade with a single partner country
BOP Adjustment Mechanism
Movements in Exchange Rates correct BOP deficits or surpluses
no need for external adjustment mechanism E.g. U.K in deficit against U.S => £ in excess supply => £ falls in value => British Export cheaper Import to Britain expensive => Deficit eliminated
Fixed Exchange Rates
Advantages of fixed exchange rates
----- Less uncertainty ----- Stabilizing speculation
----- Price discipline
Disadvantages of fixed exchange rates
Crawling Peg
A system of exchange rate adjustment in which a currency with a fixed exchange rate is allowed to fluctuate within a band of rates. The par value of the stated currency is also adjusted frequently due to market factors such as inflation. This gradual shift of the currency's par value is done as an alternative to a sudden and significant devaluation of the currency.
Crawling Peg
The exchange rate is constrained within a narrow band, but the band is allowed to move slowly over time (e.g., Mexico, Brazil, and Russia in the 1990s, before they floated).
The government sometimes affects the exchange rate and sometimes leaves it to the market.
Managed Floating Rates in the Short Run and Long Run
Exchange rate stabilization and monetary policy
Flexible Exchange Rates
Advantages of flexible exchange rates
----- Market efficiency ----- Policy advantages
Disadvantages of flexible exchange rates
Illustration of a price adjustment Mechanism government attempts to influence price levels
Deficit requires decreasing money supply - reducing general price level Surplus requires increasing money supply - increasing general price level