Financial English 《金融英语》内容结构.docx

1、Financial English 金融英语内容结构Chapter 1(1) Commodity Money: is money whose value comes from a commodity out of which it is made. (2)Representative Money :representative full bodied money refers to paper money fully backed by a precious metal. Types (3)Credit Money: is issued is based on the credit of it

2、s issuer and credit process.(4)Electronic Money :refers to depository money that is stored and processed through computer system or electronic payment system. (1)Medium of exchange: eliminates and overcomes the difficulty of barter system.(2)Unit of account :providing a common numerical measure of t

3、he value of goods and services exchanged.Functions (3)Store value :have some functions :save purchasing power, depreciates with inflation, more liquid, standard of deferred payment (1)Simple interest: refers to interest earned only on the principal of the initial investment. Formula: I = P R n S = P

4、 + I = P(1+Rn) I得到的利息 P本金 R每年利息率 n付息频率 S:本息和 (2) Compound interest: Interest for previous periods is added to principal for the calculation of interest.Formula: s = P (1+r) n I=S-PMoney Interest and Interest Rate is generally accepted in the payment for goods and services or in the repayment of debt

5、. Interest is a fee paid on borrowed assets.Interest Rate Interest Rate refers to the ratio of the interest formed during the period of borrowing and lending to the principal of the granted loan. (3)Nominal and real interest rates. Real interest rates is approximately the nominal interest rate minus

6、 the inflation rate.(4)Official and market interest rates. The former is set by the central banks or monetary authorities.Market interest rate is wholly determined by the demand and supply of funds. (1)Narrow measure of money :M0 and M1 Include currency and demand deposit used for everyday expenditu

7、res.Money Supplyrefers to the collection of money in an economy including the volume of currency in circulation and the volume of deposits at any point of time.(2)Broad measure of money :M2 and M3 Narrow measure of money adds time deposits and savings account and certain other financial assets 1.Ren

8、minbi is the legal tender and had no relation to gold,nor any foreign currencies.2.Renminbi is the sole legal money in China.3.The issuance of Renminbi is highly concentrated and the Peoples Bank of China holds the right of issuance of Renminbi.China s Monetary System Chapter 2The spot exchange rate

9、: refers to the current exchange rateThe forward exchange rate: refers to an exchange rate that is quoted and traded Definition:It is the value of a foreign nations currency in terms of the home nations currency.Foreign exchange rateTypesDirect quotation: 1 foreign currency unit =X home currency uni

10、tsQuotation Indirect quotation: 1 home currency unit=X foreign currency unitDefinition: are purchases and sales of foreign exchanges with a purpose to meet the needs of a certain economic activity.Spot transaction:purchase and sale of FX with delivery and payment to take place no more than two worki

11、ng days after the date of deal.Foreign Exchange Forward transaction: is the FX transaction that is settled on any pre-agreed date three or more business days after the deal date.foreign exchange transactionsDefinition :In the first place, it means the system utilized financing international payment.

12、 In the second place, it means the media used to discharge international obligations. The third, means the rates at which foreign exchange is quoted.Swap transaction: is the simultaneous purchase and sales of a given of FX for two different value date. Foreign exchange futures contract: is an agreem

13、ent between two parties to buy/sell a particular currency at a particular price on a particular future date, as specified in a standardized contract common to all participants in that currency futures exchange. Which is rarely buying or selling anything 。TypesForeign exchange option contract: gives

14、the buyer the right, but not the obligation, to buy (or sell) a specified amount of one currency for another at a specified price on a specified date.Chapter 3 The first is about the distinction between domestic resident and foreigners .The distinction is on the basic of normal location of resident.

15、The General Principle of BOPUnrequited Transfersdirect investment and portfolio investment (different from investor whether intends to take an active role.)Non-financial ServicesInvestment Income The Trade BalanceCurrent AccountIs the basic part of the BOP account ,which shows all transactions invol

16、ving manufactured goods or rendered services.other capitalCapital and Financial AccountMonetary goldSpecial drawing rights The reserve position in the FundForeign exchangechange in reservesCounterpart ItemsDouble -entry system,in which each transaction gives rise to both a credit entry and a debit e

17、ntry.Net Errors and Omissions The components of balance of payment statement:1. trade equilibrium, which means exports equal imports.2. currents equilibrium3. the overall balance of payment statement.Equilibrium of BOPBalance of Payment(BOP)Definition : is the record of the economic and financial fl

18、ows that take place over a specified time period between residents and non-residents of a given country. Chapter 4Features:1）a member country is free to choose its own exchange rate system 2) gold cannot be used for international transactions 3) SDR as the principal reserve asset in the internationa

19、l monetary system.Period:1976-nowThe Jamaica systemBretton woods systemFinancial systemsDemerit:Triffin paradoxMerits:facilitated international businessFeature: 1)World Bank,and the International Monetary Fund 2) US dollar based gold standard 3) US dollar serving as the funds 4) Its currency in term

20、s of gold and the US dollar and to keep fluctuations of the dollar exchange rate. 5) using an adjustable peg. 6) the doller became the most widely used currency in the international trade.Period :1944-1976Period:1870-1914The gold standardDisadvantage :its inherent lack of liquidityAdvantage: its sta

21、bilizing influencefeatures: 1) Currencies are defined in terms of their gold content. 2) Payment imbalances between countries are settled in gold. 3) Gold coins circulated in most of the world. 4) Paper money. 5) Under the system ,gold was the only standard of value.The mechanism of adjustment to pa

22、yments deficits and surplusesThe types of assets used for financing or settling payments imbalances among countriesThe key featuresThe way the foreign exchange market is organizedInternational Monetary SystemMerit: has unfettered flexibility.Demerit: lacked a unified stable monetary.Chapter 5Functio

23、ns 3)a channel through which a national government carries out its macro-economic policies.2)Optimize the reallocation and the efficient use of resources by promoting reasonable flow of funds.1)Facilitates the lending of funds from savers to those who wish to undertake investments. Definition:financ

24、ial market exist as a whole of the places and activities of the financial and transactions of financial instruments.financial marketThe money market and Capital marketThe primary market and secondary marketTypes The spot market and forward marketDefinition :are money market in which short term funds

25、 transferred between financial institutions, usually for a period of one day, that is ,they are usually overnight investment.Functions: it can reflect the demand for and supply of funds in money markets and almost all other financial markets acutely and timely. As the wind vane of the market rate. I

26、nter-bank MarketTypical Rate: LIBOR, SHIBOR and HIBOR.Definition :is a market where bills are transferred.Types: discount, on-discount, re-discount.Discount Market Eurodollar Market:denominated deposits at banks outside of the united states. Advantage: is relatively free of regulation.circumventing

27、regulatory costsMoney market1)most marketable. 2)2)are issued by the government.3)3)T-bills are short term securitiesFeaturesMargin: is the difference between the purchase price and poor value of the security and what you get at maturity.Market for Treasury BillsAdvantage: 1. virtually free of defau

28、lt risk. 2. Changes in inflation in also low because of the short term to maturity.Definition:is a bank-issued security that documents a deposit and specifies the interest rate and the maturity date.Features1) is a term security.2) is a bear instrument.3) can be bought and sold until maturity.4) in

29、large denominations.5) individuals to be indirect investors in NCDs.Market for Negotiable Certificates of Deposit( NCDs or CDs) is short repurchase agreement.Market for ReposVariations:1) reverse repo 2) term repoMarket for Commercial PapersDefinition:is an unsecured, short-term loan issued by a cor

30、poration ,typically for financing accounts receivables and inventories.Interest rate: a discount rate, higher than the deposit rate.Maturities:1)on longer than a months. 2)the average is 1-2months.Listing and OTC dealing:OTC,over-the-counter market is a decentralized market mainly for unlisted stock

31、s and park of listed stocks of small firms.Public offering is through underwriting. Private placemen is offered in a private placement.Public offering and private placementSecondary market:is a financial market in which securities that have been previously issued can be resold.Intermediary: US is in

32、vestment banks. U k is merchant banks. China is securities companies.Functions: 1)underwrite by an investment. 2)Underwriting. 3)best effort agreement.Definition :is that part of the capital market that deals with the issue of new securities.The primary marketFeatures: 1)Long maturity from one year