HND金融学导论 答案

The Bank of England has these functions:1.Banker to the government: BOE can maintain Exchequer Account; it deals with taxationreceipts and expenditure of government.2.Banker to the banks: it refer to BOE only business contact with other large financialinstitutions, it is the central depository commercial bank's reserve fund, and their loans, to act as "lender of last resort."3.Note issue: in UK and Wales the bank of England is the sole bank for note issue. In Scotlandand Northern Ireland bank issue their own notes under strict regulation.4.Management of national debt: Bank of England manages it before 1988, but debt managementoffice now responsible.5.Monetary policy implementation: it can control of interest rates and money supply growth inthe economy.6.Lender of last resort: if the commercial bank’s money are shortage, they can seek help forBank of England, for example Bills discounted or loan from Bank of England. It can ensures liquidity of financial system.7.International relations: The Bank of England works closely with other central banks andprovides services for them. And operates on committees worldwide8.Managing the Exchange Equalisation Account: it rights of intervention in foreign exchangemarkets.9.private banking: the Bank of England has a limited number of old established private bankingcustomers whose accounts were opened prior to nationalization in 1946,pus staff member’s accounts.10.open market operations: the main aim of the Bank of England’s operations in sterling moneymarkets is to meet the MPC’s interest rate decisions.11.Payment and settlement systems: in brief, it means monitoring trading, clearing and settlementsystems.2. Your Chief Executive believes that he is likely to be expected to discuss some of your bank’s services with the governor of the Bank of England.Provide a brief summary of the following bank services:(a)credit cardsA credit card is issued to users as a system of payment. It allows its holder to buy goods andservices based on the holder's promise to pay for these goods and services. The issuer of the card creates a revolving account and grants a line of credit to the consumer from which the user can borrow money for payment to a merchant or as a cash advance to the user.Themain benefit to each customer is convenience.(b)agents for paymentAssociation for Payment Clearing Systems (APACS) is used for paper transfer of fundsbetween accounts. The bankers Automated Clearing System (BACS), the computerizedversion of APACS, allows automated transfer of wages and salaries, standing orders and direct debits, etc. for full details of the types of transactions that are effected on APACS.3. London stock exchange trading platforms are designed to maximise liquidity in the stocks traded on business. London stock exchange can through to their quote driven market maker platforms for less liquid securities. it has a choice of markets that put UK and international companies in touch with one of the world's deepest pools of investment capital.A primary market involves issuing new securities in return for capital.A government or company want to sell their securities for raise money and receives money. They can issue into the primary market.And the primary can long-term loans to the government are organized by the Debt Management Office (DMO), which is responsible for the issue and sale of government securities (gilts)Reasons for such issues vary but the main reason is to cover any anticipated budget deficit where government spending is expected to exceed income from taxes.4. (a)Going public will result in increased capital for the issuer. A public offering places a value on your company's stock and insiders who retain stock may be able to sell their shares or use them as collateral. Going public also creates a type of currency in the form of its stock that the business can use to make acquisitions.By offering securities publicly, the company and its management may be able to retain a certain degree of control.going public will generally result in the ability to better promote the company. Publicly traded businesses are usually better known than non-publicly traded businesses.Along with prestige and the ability to better promote the company, going public may allow the company to attract better personnel, including high-level executives and officers. Public companies are able to offer stock options, which have the potential to substantially increase in value.(b)There are a number of reasons why a company may opt not to go public, especially if it has another way to raise capital. Going public is an expensive process and if the offering does not go through, the company will lose that money.Another disadvantage of going public is that public companies operate under close scrutiny.There is also an increased risk of exposure to civil liability for public companies, executives and directors for false or misleading statements in the registration statement.There is a new pressure on public companies to increase earnings. Even successful businesses will face this pressure as shareholders become extremely focused on the company's current earnings. Public companies are also at risk of takeover attempts.5. CDs are issued to banks and building societies, they are negotiable, in other words their ownership can be transferred to third parties. CDs are payable to bearer, technically, certificate can transferred to a third party by simply delivering it by hand. CDs’ issue terms is 3months to 5 years and for total money, it usually ranging from ￡50,000 to ￡500,000. Usually, they carry a rate of interest at par is fixed for the life of the certificate, but occasionally floating rate CDs are issued.CDs are important means of interbank financing, and the CDs being the main operator exists with discount houses in secondary market, CDs are highly liquid assets and can be realised at very short notice.6. An option which conveys the right to buy something is called a call; an option which conveys the right to sell is called a put. The reference price at which the underlying may be traded is called the strike price or exercise price. Most options have an expiration date.A call option is a financial contract between two parties. The buyer of the call option has the right, but not the obligation to buy an agreed quantity of a particular commodity or financial instrument from the seller of the option at a certain time for a certain price. An investor would buy a call option if he/she expected the market price of the share to rise.A put option is a contract between two parties to exchange an asset, the underlying, for a specified amount of cash, the strike, by a predetermined future date, the expiry or maturity. One party, the buyer of the put, has the right, but not an obligation, to sell the asset at the strike price by the future date, while the other party, the seller, has the obligation to buy the asset at the strike price if the buyer exercises the option. An investor would buy a put option if he/she expected the market price of the share to fall.。