新编金融英语教程 Chapter5 Exchange Rate
汇率的单词
汇率的单词单词：exchange rate定义与释义1.1 词性：名词1.2 释义：一种货币兑换另一种货币的比率。
1.3 英文解释：The value of one currency in terms of another currency.1.4 相关词汇：同义词：rate of exchange派生词：exchangeable（形容词，可交换的），exchanger（名词，交换器；交易所）起源与背景2.1 词源：“exchange”源自中世纪英语，最初来自古法语的“eschangier”，意为“交换”；“rate”来自古法语的“rat”，有“计算、评估”等意思，二者组合成“exchange rate”表示货币间交换的比率。
2.2 趣闻：在古代，不同地区之间的贸易往来就已经存在货币交换的情况，但当时并没有像现在这样精确规范的汇率概念。
比如在丝绸之路贸易中，商人可能只是根据双方对不同货物的需求以及各自货币的大概价值来进行粗略的交换换算，随着经济发展和国际金融体系的逐步完善，才有了如今严格界定和时刻变动的汇率体系。
常用搭配与短语3.1 短语：exchange rate fluctuation：汇率波动例句：The exchange rate fluctuation has a great impact on our export business.翻译：汇率波动对我们的出口业务有很大影响。
fixed exchange rate：固定汇率例句：Some countries used to adopt a fixed exchange rate system.翻译：一些国家过去曾采用固定汇率制度。
floating exchange rate：浮动汇率例句：The floating exchange rate allows the currency value to change according to the market conditions.翻译：浮动汇率允许货币价值根据市场状况发生变化。
国际金融-chapter five
Money 、interest rate、 exchange rate
2016/2/16
1
Key terms
• Aggregate Money Demand • interest parity
2016/2/16
2
• This chapter combines the foreignexchange market with the money market to determine the exchange rate in the short run.
Interest rate
Money supply M1s/P
• Now lets make everything disappear….
Equilibrium interest rate i1=10%
Money demand L(i,y)
real money balances
Graphical Illustration
Foreign exchange market
R€ (Euro interest rate)
2016/2/16
E$/€ (Dollar/Euro exchange rate)
20
The Equilibrium Interest Rate: The Interaction of Money Supply and Demand
• U.S. Money Supply and the Dollar/Euro Exchange Rate
– What happens when the Federal Reserve changes the U.S. money supply?
• An increase (decrease) in a country’s money supply causes its currency to depreciate (appreciate) in the foreign exchange market.
最新英文版国际金融练习题Chapter-5
INTERNATIONAL FINANCEAssignment Problems (5) Name: Student#: I. Choose the correct answer for the following questions (only ONE correct answer) (3 credits for each question, total credits 3 x 20 = 60)1. When the supply of and demand for a foreign exchange in the foreign exchange market are exactly the same, the exchange rate is the __________.A. real exchange rateB. effective exchange rateC. equilibrium exchange rateD. cross exchange rate2. An increase in the demand for French goods and services will __________.A. induce a rightward shift in the demand for euroB. induce a leftward shift in the demand for euroC. result in a rightward movement along the demand curve for euroD. result in a leftward movement along the demand curve for euro3. If U.S. demand for Japanese goods increases and Japan’s demand for U.S. products also rises at the same time, which of the following can you conclude in this situation?A. The U.S. dollar will appreciate against the yen.B. The U.S. dollar will depreciate against the yen.C. The U.S. dollar will not change relative to the yen.D. The U.S. dollar may appreciate, depreciate, or remain unchanged against theyen.4. If the price of a pair of Nike sneakers costs $85 in U.S, and the price of the same sneakers is €80 in Paris, the spot rate is $1.35 per euro, the euro __________.A. is correctly valued according to PPPB. is correctly valued according to relative PPPC. is undervalued according to PPPD. is overvalued according to PPP5. If the expected exchange rate E (S B/A) according to the relative purchasing power parity is lower than the spot exchange rate (S B/A), we may conclude that __________.A. country B is expected to run huge BOP surplus with country AB. country A’s interest rate is going to be lower than that of country B’sC. the expected inflation rate in country A is higher than the expected inflation rate in country BD. the expected inflation rate in country A is lower than the expected inflation rate in country B6. Assume that PPP holds in the long run. If the price of a tradable good is $20 in theU.S. and 100 pesos in Mexico; and the exchange rate is 7 pesos/$ right now, which of the following changes might we expect in the future?A. an increase in the price of the good in the U.SB. a decrease in the price of the good in MexicoC. an appreciation of the peso in nominal termsD. a depreciation of the peso in nominal terms7. Which basket of goods would be most likely to exhibit absolute purchasing powerparity?A. Highly tradable commodities, such as wheatB. The goods in the Consumer Price indexC. Specialized luxury goods, which are subject to different tax rates across countriesD. Locally produced goods, such as transportation services, which are not easily traded8. The absolute purchasing power parity says that the exchange rate between the two currencies should be determined by the __________ .A. relative inflation rate of the two currenciesB. relative price level of the two countriesC. relative interest rate of the two currenciesD. relative money supply of the two countries9. According to the relative PPP, if country A’s inflation rate is higher than country B’s inflation rate by 3%, __________.A. country A’s currency should depreciate against country B’s currency by 3%B. country A’s currency should appreciate against country B’s currency by 3%C. it is hard to say whether country A’s currency should appreciate or depreciate against country B’s currency. The exchange rate is influenced by many factorsD. none of the above is true10. If the law of one price holds for a particular good, we may conclude that __________.A. there is no trade barriers for the good among the different nationsB. the price of the good is the same ignoring the other expensesC. arbitrage for the good does not existD. all of the above are true11. An investor borrows money in one market, sells the borrowed money on the spot market, invests the proceeds of the sale in another place and simultaneously buys back the borrowed currency on the forward market. This is called __________.A. uncovered interest arbitrageB. covered interest arbitrageC. triangular arbitrageD. spatial arbitrage12. Real return equalization across countries on similar financial instruments is called __________.A. interest rate parityB. uncovered interest parityC. forward parityD. real interest parity13. In which of the following situations would a speculator wish to sell foreign currency on the forward market?A. If E[S1d/f] < F1d/fB. If E[S1d/f] > F1d/fC. If E[S1d/f] = F1d/fD. If E[S1d/f] = 1/F1d/f14. According to IRP, if the interest rate in country A is higher than that in country B, the forward exchange rate, defined as F1A/B is expected to be __________.A. lower than the spot rate S0A/BB. the same as the spot rate S0A/BC. higher than the spot rate S0A/BD. necessary the same as the future spot rate S1A/B15. For arbitrage opportunities to be practicable, __________.A. arbitragers must have instant access to quotesB. arbitragers must have instant access to executionsC. arbitragers must be able to execute the transactions without an initial sum of money relying on their bank’s credit standingD. All of the above must be true.16. The __________ states that the forward exchange rate quoted at time 0 for delivery at time t is equal to what the spot rate is expected to be at time t.A. interest rate parityB. uncovered interest parityC. forward parityD. real interest parity17. Assume expected value of the U.S. dollar in the future is lower than that now compared to the value of the Japanese yen. The U.S. inflation rate must be higher than Japan’s inflation rate according to __________.A. relative PPPB. Fisher equationC. International Fisher relationD. IRP18. According to covered interest arbitrage if an investor purchases a five-year U.S. bond that has an annual interest rate of 5% rather than a comparable British bond that has an annual interest rate of 6%, then the investor must be expecting the __________ to __________ at a rate at least of 1% per year over the next 5 years.A. British pound; appreciateB. British pound; revalueC. U.S. dollar; appreciateD. U.S. dollar; depreciate19. Covered interest arbitrage moves the market __________ equilibrium because __________.A. toward; investors are now more willing to invest in risky securitiesB. toward; purchasing a currency on the spot market and selling in the forward market narrows the differential between the twoC. away from; purchasing a currency on the spot market and selling in the forward market increases the differential between the twoD. away from; demand for the stronger currency forces up the interest rates on the weaker security20. If the forward exchange rate is an unbiased predictor of the expected future spot rate, which of the following is NOT true?A. The future spot rate will actually be equal to what the forward rate predictsB. The forward premium or discount reflects the expected change in the spot exchange rate.C. Speculative activity ensures that the forward rate does not diverge too far from the market’s consensus expectation.D. All of the above are true.II. Problems (40 credits)1.The Argentine peso was fixed through a currency board at Ps1.00/$ throughout the 1990s. In January 2002 the Argentine peso was floated. On January 29, 2003, it was trading at Ps3.20/$. During that one year period Argentina’s inflation rate was 20% on an annualized basis. Inflation in the United States during that same period was2.2% annualized. (10 credits)a. What should have been the exchange rate in January 2003 if purchasing power parity held?b. By what percentage was the Argentine peso undervalued on an annualized basis?2. Assume that the interest rate paid by an American borrower on a ten-year foreign bond is 10% if the bond is sold in Denmark and 7% if the bond is sold in the Netherland. Will the expected inflation rate in the Netherlands likely be higher than the expected inflation rate in Denmark? Will the Danish kroner be expected to increase in value against the Dutch guilder? Explain your answer. (5 credits)3. Suppose S = $1.25/₤ and the 1-year forward rate is F = $1.20/₤. The real interest rate on a riskless government security is 2 percent in both England and the United States. The U.S. inflation rate is 5 percent. (5 credits)a. What is England’s nominal required rate of return on riskless government securities?b. What is England’s inflation rate if the equilibrium relationships hold?4. Akira Numata, a foreign exchange trader at Credit Suisse (Tokyo), is exploring covered interest arbitrage possibilities. He wants to invest $5,000,000 or its yen equivalent, in a covered interest arbitrage between U.S. dollars and Japanese yen. He faced the following exchange rate and interest rate quotes: (12 credits)Spot rate: ¥118.60/$ 180-day forward rate: ¥117.80/$ 180-day dollar 4.8% per yearinterest rate180-day yen 3.4% per yearinterest rateThe bank does not calculate transaction costs on any individual transaction because these costs are part of the overall operating budget of the arbitrage department. Plot the given information on the covered interest parity grid. Explain and illustrate the specific steps Akira must take to make a covered interest arbitrage profit.5. On a particular day, the spot rate between Czech koruna (CKR) and the U.S. dollar is CKR30.35/$, while the interest rate on a one-year financial instrument in Czech is7.5% and 3.5% in U.S. (8 credits)a. What is your expected spot exchange rate a year later?b. You’re concerned your investment in the Czech Republic because of the economic uncertainty in that country. When you expect the future value of the koruna, you require a risk premium of 2%. What is the expected future spot rate supposed to be?Answers to Assignment Problems (5)Part II1. a. inflation differential (20% -2.2%) = 17.8%U.S. should have appreciated by 17.8%Implied exchange rate 1(1 + 17.8%) = Ps1.178/$b. (1.178 – 3.2 ) / 3.2 = -63.19%2. a. According to international Fisher equation: (1 + i d) / (1 + i f) = (1 + E[πd]) / (1 + E[πf])i d: interest rate in Denmarki f: interest rate in Netherlandπd: Danish inflation rateπf Dutch inflation rateSince (1 + i d) / (1 + i f) = (1 +10%)/(1 + 7%) > 0So, (1 + E[πd]) / (1 + E[πf]) >0, which means the expected inflation rate in Denmark would be greater than that in Netherland.b. If Danish inflation is higher than Dutch inflation, Danish kroner will be expected to decrease in value against the Dutch guilder. (relative PPP theory)3. a. U.S. nominal interest rate 2% + 5% = 7% (Fisher equation)7% - U.K.i = (1.2 – 1.25)/1.25 (IRP)U.K.i = 7% + 4% = 11%b. 11% - 2% = 9% (Fisher equation)4. a. According to IRP:i￥– i$ = 4.8%/2 – 3.4%/2 = 0.7% = 0.007(F￥/$– S￥、$) / S￥/$ = (117.8 – 118.6) / 118.6 = - 0.006745i￥– i$￥/$– S￥、$) / S￥/$United StatesA -0.007b. Akira should invest his money in the U.S., because interest rate differential is greater than forward-spot exchange rate differential.Step 1: Since Akira decides to invest $5,000,000, so he borrow yen equivalent $5,000,000 x ¥118.6/$ = ¥593,000,000Akira’s obligation: ¥593,000,000 x (1 + 1.7%) = ¥603,081,000 Step 2: Sell yen for dollar at the spot market¥593,000,000 / ¥118.6/$ = $5,000,000 (dollar inflow)Step 3: invest in U.S. market$5,000,000 x (1 + 2.4%) = $5,120,000 (payoff)Step 4: sell dollar for yen at the forward market($5,120,000) x (¥117.8/$) = ¥603,136,000 (yen inflow) Akira’s net profit: ¥603,136,000 –¥603,081,000 = ¥55,000 5. a. According to UIP, i CKR– i$ = (E(S) – S)/S7.5% - 3.5% = ((E(S) – 30.35)/30.35E[S] = (30.35 x 0.04) + 30.35 = 31.564b. i CKR– i$ = (E(S) – S)/S + risk premium7.5% - 3.5% = ((E(S) – 30.35)/30.35 + 2%E[S] = (30.35 x 0.02) + 30.35 = 30.957。
国际金融英文CHAPTER 5
Quantity theory equation
Ms = k*P*Y
Ratio of prices between countries:
e = (P/Pf) = (Ms/Msf)*(kf/k)*(Yf/Y)
IF Chapter 5
5-14
Extention: Nominal and Real Interest Rate 名义利率与实际利率
IF Chapter 5
5-6
5.2 Purchasing Power Parity 购买力平价理论
5.2.1 The law of one price 单一价格法则
A product that is easily and freely traded in a perfectly competitive global market should have the same price everywhere, once the prices at different places are expressed in the same currency.
金融英语第五章答案
Chapter 5Ⅰ. Answer the following questions in English.1.How do central banks earn money?It is a bank that can lend to other banks in times of need. And then make a profit.2. What is primary responsibility of central bank?Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a lender of last resort1to the banking sector during times of financial crisis (private banks often being integral to the national financial system ).3. What is central bank's primary liability?A central bank's primary liabilities are the currency outstanding, and these liabilities are backed by the assets the bank owns.4. What is open market operations?Open market operations are the means of implementing monetary policy by which a central bank controls its national money supply by buying and selling government securities, or other financial instruments. Monetary targets, such as interest rates or exchange rates, are used to guide this implementation.5. What are the functions of legal reserve requirements?legal reserve requirements were introduced to reduce the risk of banks overextending themselves and suffering from bank runs, as this could lead to knock-on effects on other banks.6. What is mean about M1 and M2 ?Currency and bank reserves together make up the monetary base,calledM1 and M2.7. Why do central banks establish reserve requirements for other banks? Because it plays a important role in market.8. Does the lower interest rate stimulate economy development?Low interest rates tend to stimulate borrowing from the banking system. This expansion of credit causes an expansion of the supply of money, through the money creation process in a fractional reserve banking system. This in turn leads to an unsustainable "monetary boom" during which the "artificially stimulated" borrowing seeks out diminishing investment opportunities. This boom results in widespread malinvestments8, causing capital resources to be" misallocated into areas that would not attract investment if the money supply remained stable.Ⅱ. Fill in the each blank with an appropriate word or expression.1. Through open market operations, a central bank influences themoney supply_ in an economy directly. Each time it buys securities, exchangingmoney for the security, it _raises_____ the money supply. Conversely, selling of securities lowers the money supply.2. Central banks generally earn___ money by __issuing___ currencynotes and "selling" them to the public for interest-bearing assets, such as governmentbonds.3. Typically a central bank __controls____ certain types of short-term interest rates.These _influence_____ the stock and bond markets as well as mortgage and otherinterest rates.4. All banks are required to _hold_____ a certain percentage of their assets ascapital, a rate which may be _established_______ by the central bank or the bankingsupervisor.5. The mechanism to move the market towards a "target rate" is generally to __lend____ money or borrow money in theoretically unlimited quantities,until the targeted market rate is sufficiently _close_______ to the target.6. Most countries control bank mergers and are wary of concentration in this industry _due to_____ the danger of groupthink and runaway lending bubbles based on___ a single point of failure, the credit culture of the few large banks.Ⅲ. Translate the following sentences into English.1．中国人民银行运用的货币政策工具包括准备金率、中央银行基准利率、再贴现率、中央银行贷款、公开市场操作和其他由国务院规定的政策工具。
《金融专业英语》chapter 5
5.2.1 Definition and Development of a Commercial Bank
➢ A bank can be defined in terms of : the economic functions it serves, the services it offers to its customers, or the legal basis for its existence.[5] Certainly banks can be identified by the functions they perform in the economy. They are involved in transferring funds from savers to borrowers and in paying for goods and services.
➢ Most newly created central bank money enters the economy through banks or the government. The Federal Reserve can create new assets to be carried on bank balance sheets, and then banks issue new commercial loans from those new assets. Most central bank money creation becomes, and is exponentially increased by, commercial bank money creation.
金融英语词汇及解释（5）
English Terms 中⽂翻译详情解释/例⼦EBIT 扣除利息及税项前盈利公司财务表现标准，计算⽅法为：总收⼊ - 开⽀（税项及利息除外）EBITD 扣除利息、税项及折旧前盈利公司财务表现标准，计算⽅法为：总收⼊ - 开⽀（税项、利息及折旧除外）EBITDA 扣除利息、税项、折旧及摊销前盈利公司财务表现标准，计算⽅法为：总收⼊ - 开⽀（税项、利息、折旧及摊销除外）EBITDAR 扣除利息、税项、折旧、摊销及重组成本前盈利公司财务表现标准，计算⽅法为：总收⼊ - 开⽀（税项、利息、折旧、摊销及重组成本除外）EBT 税前盈利公司财务表现标准，计算⽅法为：总收⼊ - 开⽀（税项除外）EPS 每股盈利分配给已发⾏普通股的公司盈利部分，计算⽅法为：净利润 - 优先股股息平均已发⾏股票数量公司在计算每股盈利时⼀般采⽤有关时期的加权平均已发⾏股票数量EV 企业价值评估公司价值的指标。
计算⽅法为总市值 + 债务及优先股 - 现⾦及现⾦等值EVA 经济增值 Stern Stewart & Co.始创的公司财务表现标准。
经济增值分析评估公司在从营运利润中减除资本成本情况下的剩余价值（根据现⾦税项作调整）经济增值的计算⽅法为：税后营运净利润 - （资本*资本成本）Earning Assets 盈利资产公司拥有能赚取盈利的所有资产Earnings 盈利在特定时期内⼀家公司的净利润。
⼀般来说（但不⼀定）指税后收⼊Earnings Estimate 盈利预测研究分析员对公司未来季度或年度盈利的预测Earnings Multiplier 盈利倍数根据当时利率作调整的预测价格-盈利⽐率Earnings Per Share (EPS) 每股盈利分配给已发⾏普通股的公司盈利部分，计算⽅法为：净利润 - 优先股股息平均已发⾏股票数量公司在计算每股盈利时⼀般采⽤有关时期的加权平均已发⾏股票数量Earnings Surprises 盈利不符预测公司在季度或年度报告中公布的盈利⾼于或低于研究分析员的盈利预测Earnings Yield 盈利收益最近12个⽉的每股盈利除以每股市场价格Earnout 基于财务表现额外对价条款合约条款，规定如果业务未来达到⼀定的财务⽬标，业务的卖⽅可获得额外的对价。
5.foreign exchange rate 金融英语
Rate of exchange
➢ The rate of exchange is the ratio by which one currency is expressed用…表示 in terms of换言之 another, or, in other words, the number of units of one currency that can be expressed for units of another currency.
➢ 外汇市场不是一个具体的场所,而是一个连 接全世界各大银行的电话和电传网.
➢ Forms of exchange rate ➢ (1)For the banking systems: ➢ Buying rate selling rate middle rate ➢ (2)decisions of the government ➢ Basic rate 基础汇率 ➢ Cross rate 套算汇率 ➢ For times ➢ Spot exchange rate即期汇率 ➢ Forward exchange rate 远期汇率
➢ 美元是当前最重要的国际货币，总的看来，大 约有2/3的国际贸易交易用美元结算的。
➢ 只要外汇汇率依然浮动，便存在着汇率和 利率变动的风险。
➢ So long as foreign exchange rates fluctuate there must exist risks come from variations变化 of foreign exchange rates and interest rates.
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5.2 Key Points
5.2.1 Definition of Exchange Rate
Exchange Rate
The exchange rate is the ratio of the currency of one country to the currency of another country or the price of one currency in another currency.
Given that different currencies in the world have different names and values, it is necessary for countries to set a rate, at which they can exchange their currencies. This rate is called the exchange rate.
We begin by identifying the major factors that can alter demand:
Yen/dollar
100 50
Supply of dollars
A
B
Demand
of
dollars
Demand for dollars after rise in U.S. price
Chapter 5
Exchange Rate
CONTENTS
5.1 L e a d - i n 5.2 K e y Po i n t s 5.3 L a n g u a g e N o t e s 5.4 F o l l o w - u p Ta s k s 5.5 E x t e n d e d Ta s k s
5.3 Language Notes
II. Phrases
• arbitrage profits • assumed inflation • basket of currencies • buying rate • carry trade • credit market • currency exchange • currency substitution • equilibrium exchange rate • exchange rate • fixed exchange rate
Changes in foreign interest rates relative to U.S. interest rates.
5.2 Key Points
5.2.3Changes in Supply and Demand and Their Influences on the Exchange Rate
5.2 Key Points
5.2.2 Types of Exchange Rate
Floating exchange rate A floating exchange rate, which is also called the fluctuating exchange or flexible exchange rate, is a type of exchange-rate regime, in which a currency’s value is allowed to fluctuate in response to foreignexchange market mechanisms.
Supply of dollars
A B
Supply of dollars after rise in U.S. income
Demand of dollars
Changes in U.S. real income
Changes in the dollar price of U.S. goods relative to the dollar price of foreign goods.
a profit in a
5.2.5 Foreign Exchange Markets
The foreign exchange market is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world, followed by the credit market.
5.3 Language Notes
I. Words
allowance [əˈlaʊəns] 补贴 appreciation [əˌpri:ʃiˈeɪʃn] 升值 arbitrage [ˈɑ:bɪtrɑ:ʒ] 套汇，套利 commission [kəˈmɪʃn] 佣金 depreciation [dɪˌpri:ʃɪ'eɪʃn] 贬值 dollarization [ˌdɒləraɪ'zeɪʃn] 美元化 float [fləʊt] 浮动 forward [ˈfɔ:wəd] 远期合约 impact [ˈɪmpækt] 影响 inflation [ɪnˈfleɪʃn] 通货膨胀 margin [ˈmɑ:dʒɪn] 保证金，利润，盈余 peg [peg] 固定，盯住 parity [ˈpærəti] 平价，价值对等 quote [kwəʊt] 报价 retail [ˈri:teɪl] 零售 speculation [ˌspekjuˈleɪʃn] 投机活动，投机买卖 spot [spɒt] 现货
Fixed exchange rate A fixed exchange rate is a type of exchange rate regime, where a currency’s value is fixed against either the value of another single currency, to a basket of other currencies, or to another measure of value, such as gold.
5.1Lead-in
This chapter will first of all look at the definition and types of exchange rate. Then it will talk about the changes in supply and demand and their influences
• floating exchange rate • foreign currency • foreign currency deposit • foreign reserve • full currency substitution • gold standard • hard pegs • soft pegs • international market • legal currency
5.2 Key Points
5.2.3Changes in Supply and Demand and Their Influences on the Exchange Rate
Yen/dollar
100 50
what factors could cause the supply curve of dollars to shift?
5.2 Key Points
5.2.3Changes in Supply and Demand and Their Influences on the Exchange Rate
Yen/dollar 100
Supply of dollars
A
Figure depicts the determination of the equilibrium exchange rate. The foreign exchange market “clears” at the exchange rate where the demand and supply curves intersect. At this exchange rate, the quantity demanded of dollars/month is equal to the quantity supplied of dollars/month, and we have market equilibrium (at point A). At any other exchange rate, there is either a surplus or a shortage of dollars. Market forces generated by the surplus or shortage will cause changes in the exchange rate, which will continue until equilibrium is reached.
The theory of Interest Rate Parity (IPR)
The theory of Interest Rate Parity (IPR) theory is used to analyze the relationship between the spot rate and a corresponding forward (future) rate of currencies. The IPR theory states interest rate differentials between two different currencies will be reflected in the premium or discount for the forward exchange rate on the foreign currency if there is no arbitrage - the activity of buying shares or currency in one financial market and selling it at