托马斯国际金融课后习题答案Word格式文档下载.docx

托马斯国际金融课后习题答案Word格式文档下载.docx

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sothatthetwoaddtozero>

.Anegativevalueforthisassetitemmeansthatfundsareflowingoutinorderforthecountrytoacquiremoreofthesekindsofassets.Thus,thecountryisincreasingitsholdingsofofficialreserveassets.

6.ItemeisatransactioninwhichforeignofficialholdingsofU.S.assetsincrease.Thisisapositive<

credit>

itemforofficialreserveassetsandanegative<

debit>

itemforprivatecapitalflowsastheU.S.bankacquirespoundbankdeposits.ThedebititemcontributestoaU.S.deficitintheofficialsettlementsbalance<

whilethecredititemisrecorded"

belowtheline,"

permittingtheofficialsettlementsbalancetobeindeficit>

.Allothertransactionsinvolvedebitandcredititemsbothofwhichareincludedintheofficialsettlementsbalance,sothattheydonotdirectlycontributetoadeficit<

orsurplus>

intheofficialsettlementsbalance.

8.a.Merchandisetradebalance:

$330-198=$132

Goodsandservicesbalance:

$330-198+196-204=$124

Currentaccountbalance:

$330-198+196-204+3-8=$119

Officialsettlementsbalance:

$330-198+196-204+3-8+102-202+4=$23

b.Changeinofficialreserveassets<

net>

=-officialsettlementsbalance=-$23.

Thecountryisincreasingitsnetholdingsofofficialreserveassets.

10.a.Internationalinvestmentposition<

billions>

:

$30+20+15-40-25=$0.

Thecountryisneitheraninternationalcreditornoradebtor.Itsholdingofinternationalassetsequalsitsliabilitiestoforeigners.

b.Acurrentaccountsurpluspermitsthecountrytoaddtoitsnetclaimsonforeigners.Forthisreasonthecountry'

sinternationalinvestmentpositionwillbecomeapositivevalue.Theflowincreaseinnetforeignassetsresultsinthestockofnetforeignassetsbecomingpositive.

Chapter3

2.Exportsofmerchandiseandservicesresultinsupplyofforeigncurrencyintheforeignexchangemarket.Domesticsellersoftenwanttobepaidusingdomesticcurrency,whiletheforeignbuyerswanttopayintheircurrency.Intheprocessofpayingfortheseexports,foreigncurrencyisexchangedfordomesticcurrency,creatingsupplyofforeigncurrency.Internationalcapitalinflowsresultinasupplyofforeigncurrencyintheforeignexchangemarket.Inmakinginvestmentsindomesticfinancialassets,foreigninvestorsoftenstartwithforeigncurrencyandmustexchangeitfordomesticcurrencybeforetheycanbuythedomesticassets.Theexchangecreatesasupplyofforeigncurrency.Salesofforeignfinancialassetsthatthecountry'

sresidentshadpreviouslyacquired,andborrowingfromforeignersbythiscountry'

sresidentsareotherformsofcapitalinflowthatcancreatesupplyofforeigncurrency.

4.TheU.S.firmobtainsaquotationfromitsbankonthespotexchangerateforbuyingyenwithdollars.Iftherateisacceptable,thefirminstructsitsbankthatitwantstousedollarsfromitsdollarcheckingaccounttobuy1millionyenatthisspotexchangerate.ItalsoinstructsitsbanktosendtheyentothebankaccountoftheJapanesefirm.Tocarryoutthisinstruction,theU.S.bankinstructsitscorrespondentbankinJapantotake1millionyenfromitsaccountatthecorrespondentbankandtransfertheyentothebankaccountoftheJapanesefirm.<

TheU.S.bankcouldalsouseyenatitsownbranchifithasabranchinJapan.>

6.Thetraderwouldseekoutthebestquotedspotrateforbuyingeuroswithdollars,eitherthroughdirectcontactwithtradersatotherbanksorbyusingtheservicesofaforeignexchangebroker.Thetraderwouldusethebestratetobuyeurospot.Sometimeinthenexthourorso<

or,typicallyatleastbytheendoftheday>

thetraderwillentertheinterbankmarketagain,toobtainthebestquotedspotrateforsellingeurosfordollars.Thetraderwillusethebestspotratetosellherpreviouslyacquiredeuros.Ifthespotvalueoftheeurohasrisenduringthisshorttime,thetradermakesaprofit.

8.a.Thecrossratebetweentheyenandthekroneistoohigh<

theyenvalueofthekroneistoohigh>

relativetothedollar-foreigncurrencyexchangerates.Thus,inaprofitabletriangulararbitrage,youwanttosellkroneratthehighcrossrate.Thearbitragewillbe:

Usedollarstobuykronerat$0.20/krone,usethesekronertobuyyenat25yen/krone,andusetheyentobuydollarsat$0.01/yen.Foreachdollarthatyousellinitially,youcanobtain5kroner,these5kronercanobtain125yen,andthe125yencanobtain$1.25.Thearbitrageprofitforeachdollaristherefore25cents.

b.Sellingkronertobuyyenputsdownwardpressureonthecrossrate<

theyenpriceofkrone>

.Thevalueofthecrossratemustfallto20<

=0.20/0.01>

yen/kronetoeliminatetheopportunityfortriangulararbitrage,assumingthatthedollarexchangeratesareunchanged.

10.a.TheincreaseinsupplyofSwissfrancsputsdownwardpressureontheexchange-ratevalue<

$/SFr>

ofthefranc.ThemonetaryauthoritiesmustintervenetodefendthefixedexchangeratebybuyingSFrandsellingdollars.

b.Theincreaseinsupplyoffrancsputsdownwardpressureontheexchange-ratevalue<

c.Theincreaseinsupplyoffrancsputsdownwardpressureontheexchange-ratevalue<

d.Thedecreaseindemandforfrancsputsdownwardpressureontheexchange-ratevalue<

Chapter4

2.Youwillneeddataonfourmarketrates:

Thecurrentinterestrate<

oryield>

onbondsissuedbytheU.S.governmentthatmatureinoneyear,thecurrentinterestrate<

onbondsissuedbytheBritishgovernmentthatmatureinoneyear,thecurrentspotexchangeratebetweenthedollarandpound,andthecurrentone-yearforwardexchangeratebetweenthedollarandpound.Dotheseratesresultinacoveredinterestdifferentialthatisveryclosetozero?

4.a.TheU.S.firmhasanassetpositioninyen—ithasalongpositioninyen.Tohedgeitsexposuretoexchangeraterisk,thefirmshouldenterintoaforwardexchangecontractnowinwhichthefirmcommitstosellyenandreceivedollarsatthecurrentforwardrate.Thecontractamountsaretosell1millionyenandreceive$9,000,bothin60days.

b.Thestudenthasanassetpositioninyen—alongpositioninyen.Tohedgetheexposuretoexchangeraterisk,thestudentshouldenterintoaforwardexchangecontractnowinwhichthestudentcommitstosellyenandreceivedollarsatthecurrentforwardrate.Thecontractamountsaretosell10millionyenandreceive$90,000,bothin60days.

c.TheU.S.firmhasanliabilitypositioninyen—ashortpositioninyen.Tohedgeitsexposuretoexchangeraterisk,thefirmshouldenterintoaforwardexchangecontractnowinwhichthefirmcommitstoselldollarsandreceiveyenatthecurrentforwardrate.Thecontractamountsaretosell$900,000andreceive100millionyen,bothin60days.

6.Relativetoyourexpectedspotvalueoftheeuroin90days<

$1.22/euro>

thecurrentforwardrateoftheeuro<

$1.18/euro>

islow—theforwardvalueoftheeuroisrelativelylow.Usingtheprincipleof"

buylow,sellhigh,"

youcanspeculatebyenteringintoaforwardcontractnowtobuyeurosat$1.18/euro.Ifyouarecorrectinyourexpectation,thenin90daysyouwillbeabletoimmediatelyresellthoseeurosfor$1.22/euro,pocketingaprofitof$0.04foreacheurothatyouboughtforward.Ifmanypeoplespeculateinthisway,thenmassivepurchasesnowofeurosforward<

increasingthedemandforeurosforward>

willtendtodriveuptheforwardvalueoftheeuro,towardacurrentforwardrateof$1.22/euro.

8.a.TheSwissfrancisataforwardpremium.Itscurrentforwardvalue<

$0.505/SFr>

isgreaterthanitscurrentspotvalue<

$0.500/SFr>

.

b.Thecoveredinterestdifferential"

infavorofSwitzerland"

is<

1+0.005>

⋅<

0.505>

/0.500>

-<

1+0.01>

=0.005.<

Notethattheinterestrat