金融英语课后答案汇总
Part One
1. What are the main roles of banks
答：Although banks share many common features with other profit-seeking business,they play a unique role in the economy through mobilizing savings,allocating capital funds to fiance productive investment,transmitting monetary policy,providing a payment system and transforming risks.
3. According to the revised edition of the Law of the People's Republic of China on the People's Bank of China ,what functions does the PBC perform
答：The PBC 's key functions are to conduct monetary policy, prevent and dissolve financial risks, and maintain financial stability under the leadership of the State Council.
4. Can you give some examples of indirect instruments for implementing monetary policy
答：Indirect instruments as required reserve ratio, interest rate adjustment and open market operations.
9. What is your definition of share and bond
答：Shares are certificates or book entries representing ownership in a corporation or similar are written evidences of debts.
13. What is your definition of “securities”
答：Securities are paper certificates (definitive securities) or electronic records (book-entry securities) evidencing ownership of equity (stock) or debt obligations (bonds).
Part Two
2. What are the objectives of banking supervision
First, the key objective of supervision is to maintain stability and public confidence in financial system.
The second goal of bank supervisions to ensure that bank operate in a safe and sound manner and that they hold capital and reserve sufficient to cover the risks that may arise in their business.
Third, a related goal is to protect depositors’ funds and , if any bank should fail, to minimize the losses to be absorbed by the deposit insurance fund.
The fourth goal of bank supervision is to foster an efficient and competition banking system that is responsive to the public need for high quality financial services at reasonable cost.
The fifth and final goal of bank supervision is to ensure compliance with banking laws and regulations.
3. What risks might the commercial banks have to face
(1)credit risk (2)market risk (3)liquidity risk (4)operational risk (5)legal risk (6)reputation risk
4. What are the implication of credit risk, market risk, liquidity risk and operational risk
Credit risk: A major type of risk that banks face is credit risk or the failure of a counterpart to perform according to a contractual arrangement.
Market risk: Two specific elements of market risk are foreign exchange risk and interest risk. Banks face a risk of losses in on- and off-balance sheet positions arising from movement in exchange rates. Interest rate risk prefers to the exposure of a bank’s financial condition to adverse movements in interest rates.
Liquidity risk: Liquidity risk arises from the inability of a bank to accommodate decreases in liabilities or to fund increases in assets.
Operational risk: The most important types of operational risk involve breakdowns in internal controls and corporate governance..
what levels does the Basel Accord set the minimum capital ratio requirements for internationally active banks
The Accord sets minimum capital ratio requirements for internationally active banks of 4% tier one capita and 8% total capital (tier one plus tier two) in relation to risk-weighted assets.
Part Three
1. What does foreign exchange include
答：Foreign exchange includes the following means of payments and assets denominated in a foreign currency that can be used for international settlement:
●Foreign currencies, including banknotes and coins;
●Payment vouchers denominated in foreign currency, including negotiable
instruments, bank certificates of deposit and certificates of postal savings;
●Securities denominated in foreign currency, including govern ment bonds,
corporate bonds and stocks;
●Super-national currencies such as Special Drawing Rights and the Euro; and
●Other assets denominated in foreign currency.
3. What are the requirements for domestic institutions for opening foreign exchange accounts abroad
答：Domestic entities which meet one of the following requirements may apply for opening a foreign exchange account abroad:
●Expecting small amount income during a certain period of time abroad;
●Expecting small amount expenditure during a certain period of time abroad;
●Undertaking overseas construction projects;and issuing securities denominated in foreign currency abroad.
6. Give the definition of foreign exchange
答：Foreign exchange , or forex , is foreign money. All foreign currency, consisting of founds held with banks abroad, or bills or cheques, again in foreign currency and payable abroad , are termed foreign exchange.
9. Give the definition of spot and forward transaction
答：Spot transactions involve today’s prices of currency and deliver y of the currency within two business days, except for Canadian dollar (CAD), which must be delivered in one day.
10. Tell the difference between forward and futures transactions
答：(1) Forward transactions involve today’s prices of currency and delivery on a stipulated future date.
(2) Futures transactions are always traded on exchanges. In order to be marketable on exchanges, futures contracts are standardized in terms of quantity, settlement
dates and quotation.
Part Four
14. How could a bank earn interest income
答：The principal source of income for the majority of banks is still the interest received on the funds that the institution has at its disposal and is able to lend out in some a bank lends out money it will generally charge interest to the customer. 21. Why should a bank keep sufficient liquid assets
答：It is important for a bank to hold sufficient liquid assets to meet the demands of depositors who may seek to withdraw their funds. However,maintenance of too high a level of liquid assets could be expensive. Cash balances in particular yield no income,yet will cost the same as any other asset to fund.
25. What are the three major activities included in a bank's Statement of Cash Flows
答：The statement of cash flows reports cash flows relating to operating,investing and financing activities of a bank.
Part five
4. What are negotiable instruments list some examples.
答：From a functional perspective, negotiable instruments are documents used in commerce to secure the payment of money. Paying large sums of money in cash is both inconvenient and, unfortunately, risky. In all cases, negotiable instruments represent a right to payment. A right is, by definition, a promise and not a tangible piece of property. So, negotiable instruments are classified as choses in action. The three main types of them are the following: Bills of Exchange, Cheques, Promissory Notes.
7. What’s the difference between capital lease and operating lease
答：1: Whether the ownership of property is to be transferred by the end of lease term.
2: Whether the lease has an operation to purchase the leased property at a bargain price.
3: The lease term is long to or short in according to the estimated economic life of the leased property.
4: Whether the lease is a cancelable lease.
5: Whether the lease is full-payout lease.
9. What’s the meaning of Account Receivable Financing
答：Accounts Receivable represents a promise from customers to pay for a goods sold or services rendered. Account Receivable Financing is a form of collateralized lending in which accounts receivables are the collateral.
12. What are basic characteristics of money mark securities
答：Money-mark securities, which are discussed in details later in this chapter, have three basic characteristics in common:
They are usually sold in large denominations.
They have low default risk.
They mature in one year or less from their original issue date. Most money marker instruments mature in less than 120 days.
Why teasury bills are attractive to investors
答：Teasury bills are attractive to investors because they are backed by the government and therefore are virtually free of default risk .Even if the government ran out of money, it could simply print more to pay them off when they risk of unexpected changes in inflation is also low because of their short-termmaturity. 15. What are the features of inter-bank markets
答：Inter-bank markets are money markets in which short-term funds transferred (lent or borrowed) between financial institutions, usually for one day, that is , they are usually overnight investment . The interest rate for borrowing these funds is close to ,but always slightly higher than ,the rate that is available from the central bank. 17．How have NCDs become the second most popular money market instruments
答：Negotiable CDs are in large denominations .Although NCDs denominations are too large for individual investors , they are sometimes purchased by money market funds that have pooled individual investor’s funds. Thus , the existence of money market funds allows individuals to be indirect investors in NCDs ,marking a more active NCD market.
products does the on-line banking provide
答：basic products and services, intermediate products and services ,advanced products and services.
Part Six
1,What categories can the loan be divided according to their risk
答：The five-category system classifies bank loans according to their inherent risks as pass(normal),special-mention,substandard,doubtful and loss.
What are the commonly used methods of credit analysis
答：Tranditionally,key risk factors have been classified according to the five CS of credit:character,capital,capacity,conditions,and collateral. Golden and Walker identify the five CS of bad credit,representing things to guard against to help prevent include complacency,carelessness,communication breakdown,contingencies,and competition.
A useful framework for sorting out the facts and opinions in credit analysis is the 5Ps approach:people,purpose,payment,protection,and perspective.
How can a bank take security for an advance
答：A bank has different kinds of security as cover for advance to his are several ways in which a bank may take security for an advance by lien,pledge,mortgage and hypothecation.