chapter8 Financial Structure

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金融学课后习题答案第八章

CHAPTER 8VALUATION OF KNOWN CASH FLOWS: BONDSObjectivesTo show how to value contracts and securities that promise a stream of cash flows that are known with certainty.To understand the shape of the yield curve .To understand how bond prices and yields change over time.OutlineUsing Present Value Formulas to Value Known Cash FlowsThe Basic Building Blocks: Pure Discount BondsCoupon Bonds, Current Yield, and Yield to MaturityReading Bond ListingsWhy Yields for the Same Maturity DifferThe Behavior of Bond Prices over TimeSummaryA change in market interest rates causes a change in the opposite direction in the market values of all existing contracts promising fixed payments in the future.The market prices of $1 to be received at every possible date in the future are the basic building blocks for valuing all other streams of known cash flows. These prices are inferred from the observed market prices of traded bonds and then applied to other streams of known cash flows to value them.An equivalent valuation can be carried out by applying a discounted cash flow formula with a different discount rate for each future time period.Differences in the prices of fixed-income securities of a given maturity arise from differences in coupon rates, default risk, tax treatment, callability, convertibility, and other features.Over time the prices of bonds converge towards their face value. Before maturity, however, bond prices can fluctuate a great deal as a result of changes in market interest rates.Solutions to Problems at End of ChapterBond Valuation with a Flat Term Structure1. Suppose you want to know the price of a 10-year 7% coupon Treasury bond that pays interestannually.a. You have been told that the yield to maturity is 8%. What is the price?b. What is the price if coupons are paid semiannually, and the yield to maturity is 8% per year?c. Now you have been told that the yield to maturity is 7% per year. What is the price? Could youhave guessed the answer without calculating it? What if coupons are paid semiannually?SOLUTION:a. With coupons paid once a year:b. With coupons paid twice a year:c. Price = 100. When the coupon rate and yield to maturity are the same, the bond sells at par value . theprice equals the face value of the bond).2. Assume six months ago the US Treasury yield curve was flat at a rate of 4% per year (with annual compounding) and you bought a 30-year US Treasury bond. Today it is flat at a rate of 5% per year. What rate of return did you earn on your initial investment:a.If the bond was a 4% coupon bond?b.If the bond was a zero coupon bond?c.How do your answer change if compounding is semiannual?SOLUTION:a and b.Step 1: Find prices of the bonds six months ago:n i PV FV PMT Result304?1004PV =100 Coupon =4%Zero304?1000PV = couponStep 2: Find prices of the bonds today:n i PV FV PMT Result Coupon =5?1004 4%Zero5?1000 couponStep 3: Find rates of return:Rate of return = (coupon + change in price)/initial price4% coupon bond: r = (4 + 100)/100 = or %Zero-coupon bond: r = (0 + / = or %. Note that the zero-coupon bond is more sensitive to yield changes than the 4% coupon bond.c.Step 1: Find prices of the bonds six months ago:n i PV FV PMT Result Coupon=4602?1002PV =100 %Zero602?1000PV = couponStep 2: Find prices of the bonds today:n i PV FV PMT Result59?1002 Coupon=4%Zero59?1000 couponStep 3: Find rates of return:Rate of return = (coupon + change in price) / initial price4% coupon bond: r= (2 + 100)/100 = or %Zero coupon bond: r= (0 + / = or %. Note that the zero-coupon bond is more sensitive to yield changes than the 4% coupon bond.Bond Valuation With a Non-Flat Term Structure3. Suppose you observe the following prices for zero-coupon bonds (pure discount bonds) that have no risk of default:Maturity Price per $1 of Face Value Yield to Maturity1 year%2 yearsa.What should be the price of a 2-year coupon bond that pays a 6% coupon rate, assuming couponpayments are made once a year starting one year from now?b.Find the missing entry in the table.c.What should be the yield to maturity of the 2-year coupon bond in Part a?d.Why are your answers to parts b and c of this question different?SOLUTION:a. Present value of first year's cash flow = 6 x .97 =Present value of second year's cash flow = 106 x .90 =Total present value =b. The yield to maturity on a 2-year zero coupon bond with price of 90 and face value of 100 is %c. The yield to maturity on a 2-year 6% coupon bond with price of isto maturity.Coupon Stripping4. You would like to create a 2-year synthetic zero-coupon bond. Assume you are aware of the following information: 1-year zero- coupon bonds are trading for $ per dollar of face value and 2-year 7% coupon bonds (annual payments) are selling at $ (Face value = $1,000).a. What are the two cash flows from the 2-year coupon bond?b. Assume you can purchase the 2-year coupon bond and unbundle the two cash flows and sell them.i. How much will you receive from the sale of the first payment?ii. How much do you need to receive from the sale of the 2-year Treasury strip to break even?SOLUTION:a. $70 at the end of the first year and $1070 at the end of year 2.b. i. I would receive .93 x $70 = $ from the sale of the first payment.ii. To break even, I would need to receive $ $ = $ from the sale of the 2-year strip.The Law of One price and Bond Pricing5. Assume that all of the bonds listed in the following table are the same except for their pattern of promised cash flows over time. Prices are quoted per $1 of face value. Use the information in the table and the Law of One Price to infer the values of the missing entries. Assume that coupon payments are annual.SOLUTION:Bond 1:From Bond 1 and Bond 4, we can get the missing entries for the 2-year zero-coupon bond. We know from bond 1 that:= +2. This is also equal to (1+z 1) + (1+z 2)2 where z 1 and z 2 are the yields to maturity on one-year zero-coupon and two-year zero-coupon bonds respectively. From bond 4 , we have z 1, we can find z 2.– = (1+z 2)2, hence z 2 = %.To get the price P per $1 face value of the 2-year zero-coupon bond, using the same reasoning: – = , hence P =To find the entries for bond 3: first find the price, then the yield to maturity. To find the price, we can use z 1 and z 2 found earlier:PV of coupon payment in year 1: x =PV of coupon + principal payments in year 2: x = Total present value of bond 3 =Hence the table becomes:Bond Features and Bond Valuation6. What effect would adding the following features have on the market price of a similar bond which does not have this feature?a.10-year bond is callable by the company after 5 years (compare to a 10-year non-callable bond);b.bond is convertible into 10 shares of common stock at any time (compare to a non-convertiblebond);c.10-year bond can be “put back” to the company after 3 years at par (puttable bond) (compare toa 10-year non-puttable bond)d.25-year bond has tax-exempt coupon paymentsSOLUTION:a.The callable bond would have a lower price than the non-callable bond to compensate thebondholders for granting the issuer the right to call the bonds.b.The convertible bond would have a higher price because it gives the bondholders the right to converttheir bonds into shares of stock.c.The puttable bond would have a higher price because it gives the bondholders the right to sell theirbonds back to the issuer at par.d.The bond with the tax-exempt coupon has a higher price because the bondholder is exempted frompaying taxes on the coupons. (Coupons are usually considered and taxed as personal income).Inferring the Value of a Bond Guarantee7. Suppose that the yield curve on dollar bonds that are free of the risk of default is flat at 6% per year. A 2-year 10% coupon bond (with annual coupons and $1,000 face value) issued by Dafolto Corporation is rates B, and it is currently trading at a market price of $918. Aside from its risk of default, the Dafolto bond has no other financially significant features. How much should an investor be willing to pay for a guarantee against Dafolto’s defaulting on this bond?SOLUTION:If the bond was free of the risk of default, its yield would be 6%.the value of a guarantee against default: = $The implied Value of a Call Provision and Convertibility8. Suppose that the yield curve on bonds that are free of the risk of default is flat at 5% per year. A 20-year default-free coupon bond (with annual coupons and $1,000 face value) that becomes callable after 10 years is trading at par and has a coupon rate of %.a.What is the implied value of the call provision?b. A Safeco Corporation bond which is otherwise identical to the callable % coupon bond describedabove, is also convertible into 10 shares of Safeco stock at any time up to the bond’s maturity. If its yield to maturity is currently % per year, what is the implied value of the conversion feature?SOLUTION:a.We have to find the price of the bond if it were only free of the risk of default.is the implied value of the call provision: – 1000 = $Note that the call provision decreases the value of the bond.b.We have to find the price of the Safeco Corporation:This bond has the same features as the % default free callable bond described above, plus an additional feature: it is convertible into stocks. Hence the implied value of the conversion feature is the difference between the values of both bonds: = $. Note that the conversion feature increases the value of the bond.Changes in Interest Rates and Bond Prices9. All else being equal, if interest rates rise along the entire yield curve, you should expect that:i. Bond prices will fallii. Bond prices will riseiii. Prices on long-term bonds will fall more than prices on short-term bonds.iv. Prices on long-term bonds will rise more than prices on short-term bondsa. ii and iv are correctb. We can’t be certain that prices will changec. Only i is correctd. Only ii is correcte. i and iii are correctSOLUTION:The correct answer is e.Bond prices are inversely proportional to yields hence when yields increase, bond prices fall. Long-term bonds are more sensitive to yield changes than short-term bonds.。

财金英语教程参考答案

财金英语教程参考答案Chapter 1: Introduction to Finance1. What is finance?- Finance is the management of money and includesactivities such as investing, borrowing, lending, budgeting, saving, and forecasting.2. What are the three main functions of finance?- The three main functions of finance are planning, acquiring, and managing financial resources.3. What is the time value of money?- The time value of money is the concept that a sum of money is worth more now than the same sum in the future dueto its potential earning capacity.4. How does inflation affect the value of money?- Inflation erodes the purchasing power of money over time, meaning that the same amount of money will buy fewer goodsand services in the future.5. What is the difference between a bond and a stock?- A bond is a debt instrument where an investor lends money to an entity in exchange for interest payments, while a stock represents ownership in a company and offers thepotential for capital gains and dividends.Chapter 2: Financial Statements1. What are the four main financial statements?- The four main financial statements are the balance sheet, income statement, cash flow statement, and statement of changes in equity.2. What is the purpose of a balance sheet?- The balance sheet provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and equity.3. How is net income calculated?- Net income is calculated by subtracting all expensesfrom the total revenue of a company during a specific period.4. What does the cash flow statement show?- The cash flow statement shows the inflow and outflow of cash within a business over a period of time, categorizedinto operating, investing, and financing activities.5. What is the statement of changes in equity?- The statement of changes in equity shows the changes in the equity accounts of a company over a period of time, including retained earnings, capital contributions, and other comprehensive income.Chapter 3: Financial Analysis1. What are the main types of financial analysis?- The main types of financial analysis are ratio analysis,horizontal analysis, vertical analysis, and trend analysis.2. What is the purpose of ratio analysis?- Ratio analysis is used to evaluate a company's financial health by comparing various financial ratios such asliquidity, profitability, and leverage ratios.3. What is horizontal analysis?- Horizontal analysis involves comparing financial statement items over multiple periods to identify trends and changes in performance.4. What is vertical analysis?- Vertical analysis, also known as common-size analysis,is a method of financial statement analysis where each itemis expressed as a percentage of a base figure, typicallytotal assets or total revenue.5. What is trend analysis?- Trend analysis involves examining the historical data of financial metrics over time to predict future trends and performance.Chapter 4: Risk Management1. What is risk management?- Risk management is the process of identifying, assessing, and prioritizing potential risks to an investment or project, and taking steps to mitigate or avoid these risks.2. What are the types of risks in finance?- The types of risks in finance include market risk,credit risk, liquidity risk, operational risk, and legal risk.3. What is diversification?- Diversification is a risk management strategy that involves spreading investments across various financial instruments, industries, or geographic regions to reduce overall risk.4. What is hedging?- Hedging is a risk management technique used to reducethe risk of price fluctuations in an asset by taking an offsetting position in a related security.5. What is the role of insurance in risk management?- Insurance is a risk management tool that providesfinancial protection against potential losses or damages by transferring the risk to an insurance company in exchange for a premium.Chapter 5: Investment Strategies1. What are the different types of investment strategies?- Types of investment strategies include passive investing, active investing, value investing, growth investing, and income investing.2. What is the difference between passive and active investing?- Passive investing involves a "set it and forget it" approach, typically using index funds, while active investingrequires regular buying and selling of individual securities based on market research and analysis.3. What is value investing?- Value investing is an investment strategy that involves buying stocks that are considered undervalued by the market, with the expectation that their true value will eventually be recognized.4. What is growth investing?- Growth investing focuses on companies that are expected to grow at an above-average rate compared to the market, often investing in companies with strong competitive advantages and high growth potential.5. What is income investing?- Income investing is an investment strategy aimed at generating a steady stream of income from investments, typically through dividends or interest payments.Chapter 6: International Finance1. What is international。

米什金货币金融学英文版习题答案chapter8英文习题

米什金货币金融学英文版习题答案chapter8英文习题Economics of Money, Banking, and Financial Markets, 11e, Global Edition (Mishkin) Chapter 8 An Economic Analysis of Financial Structure8.1 Basic Facts About Financial Structure Throughout the World1) American businesses get their external funds primarily fromA) bank loans.B) bonds and commercial paper issues.C) stock issues.D) loans from nonbank financial intermediaries.Answer: DAACSB: Analytical Thinking2) Of the sources of external funds for nonfinancial businesses in the United States, loans from banks and other financial intermediaries account for approximately ________ of the total.A) 6%B) 40%C) 56%D) 60%Answer: CAACSB: Analytical Thinking3) Of the sources of external funds for nonfinancial businesses in the United States, corporate bonds and commercial paper account for approximately ________ of the total.A) 5%B) 10%C) 32%D) 50%Answer: CAACSB: Analytical Thinking4) Of the following sources of external finance for American nonfinancial businesses, the least important isA) loans from banks.B) stocks.C) bonds and commercial paper.D) loans from other financial intermediaries.Answer: BAACSB: Analytical Thinking5) Of the sources of external funds for nonfinancial businesses in the United States, stocks account for approximately ________ of the total.A) 2%B) 11%C) 20%D) 40%Answer: BAACSB: Analytical Thinking6) Of the four sources of external funding for nonfinancial businesses, the least often used in the U.S. isA) bank loans.B) nonbank loans.C) bonds.D) stock.Answer: DAACSB: Analytical Thinking7) Which of the following statements concerning externalsources of financing for nonfinancial businesses in the United States are TRUE?A) Stocks are a far more important source of finance than are bonds.B) Stocks and bonds, combined, supply less than one-half of the external funds.C) Financial intermediaries are the least important source of external funds for businesses.D) Since 1970, more than half of the new issues of stock have been sold to American households.Answer: BAACSB: Reflective Thinking8) Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are TRUE?A) Issuing marketable securities is the primary way that they finance their activities.B) Bonds are the least important source of external funds to finance their activities.C) Stocks are a relatively unimportant source of finance for their activities.D) Selling bonds directly to the American household is a major source of funding for American businesses.Answer: CAACSB: Reflective Thinking9) With regard to external sources of financing for nonfinancial businesses in the United States, which of the following are accurate statements?A) Marketable securities account for a larger share of external business financing in the United States than in Germany andJapan.B) Since 1970, most of the newly issued corporate bonds and commercial paper have been sold directly to American households.C) Direct finance accounts for more than 50 percent of the external financing of American businesses.D) Smaller businesses almost always raise funds by issuing marketable securities.Answer: AAACSB: Reflective Thinking10) Nonfinancial businesses in Germany, Japan, and Canada raise most of their fundsA) by issuing stock.B) by issuing bonds.C) from nonbank loans.D) from bank loans.Answer: DAACSB: Application of Knowledge11) As a source of funds for nonfinancial businesses, stocks are relatively more important inA) the United States.B) Germany.C) Japan.D) Canada.Answer: DAACSB: Application of Knowledge12) Direct finance involves the sale to ________ of marketable securities such as stocks and bonds.A) householdsB) insurance companiesC) pension fundsD) financial intermediariesAnswer: AAACSB: Application of Knowledge13) Regulation of the financial systemA) occurs only in the United States.B) protects the jobs of employees of financial institutions.C) protects the wealth of owners of financial institutions.D) ensures the stability of the financial system.Answer: DAACSB: Reflective Thinking14) One purpose of regulation of financial markets is toA) limit the profits of financial institutions.B) increase competition among financial institutions.C) promote the provision of information to shareholders, depositors and the public.D) guarantee that the maximum rates of interest are paid on deposits.Answer: CAACSB: Reflective Thinking15) Property that is pledged to the lender in the event that a borrower cannot make his or her debt payment is calledA) collateral.B) points.C) interest.D) good faith money.Answer: AAACSB: Application of Knowledge16) Collateralized debt is also know asA) unsecured debt.B) secured debt.C) unrestricted debt.D) promissory debt.Answer: BAACSB: Application of Knowledge17) Credit card debt isA) secured debt.B) unsecured debt.C) restricted debt.D) unrestricted debt.Answer: BAACSB: Application of Knowledge18) The predominant form of household debt isA) consumer installment debt.B) collateralized debt.C) unsecured debt.D) unrestricted debt.Answer: BAACSB: Analytical Thinking19) If you default on your auto loan, your car will be repossessed because it has been pledged as ________ for the loan.A) interestB) collateralC) dividendD) commodityAnswer: BAACSB: Analytical Thinking20) Commercial and farm mortgages, in which property is pledged as collateral, account forA) one-quarter of borrowing by nonfinancial businesses.B) one-half of borrowing by nonfinancial businesses.C) one-twentieth of borrowing by nonfinancial businesses.D) two-thirds of borrowing by nonfinancial businesses.Answer: AAACSB: Application of Knowledge21) A ________ is a provision that restricts or specifies certain activities that a borrower can engage in.A) residual claimantB) risk hedgeC) restrictive barrierD) restrictive covenantAnswer: DAACSB: Application of Knowledge22) A clause in a mortgage loan contract requiring the borrower to purchase homeowner's insurance is an example of aA) proscriptive covenant.B) prescriptive covenant.C) restrictive covenant.D) constraint-imposed covenant.Answer: CAACSB: Application of Knowledge23) Which of the following is NOT one of the eight basic puzzles about financial structure?A) Stocks are the most important source of finance for American businesses.B) Issuing marketable securities is not the primary way businesses finance their operations.C) Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financialmarkets.D) Banks are the most important source of external funds to finance businesses.Answer: AAACSB: Reflective Thinking24) Which of the following is NOT one of the eight basic puzzles about financial structure?A) Debt contracts are typically extremely complicated legal documents that place substantial restrictions on the behavior of the borrower.B) Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financial markets.C) Collateral is a prevalent feature of debt contracts for both households and business.D) There is very little regulation of the financial system.Answer: DAACSB: Reflective Thinking8.2 Transaction Costs1) The current structure of financial markets can be best understood as the result of attempts by financial market participants toA) adapt to continually changing government regulations.B) deal with the great number of small firms in the United States.C) reduce transaction costs.D) cartelize the provision of financial services.Answer: CAACSB: Reflective Thinking2) The reduction in transactions costs per dollar of investment as the size of transactions increases isA) discounting.B) economies of scale.C) economies of trade.D) diversification.Answer: BAACSB: Application of Knowledge3) By bundling share purchases of many investors together mutual funds can take advantage of economies of scale and thereby lowerA) adverse selection.B) moral hazard.C) transactions costs.D) diversification.Answer: CAACSB: Analytical Thinking4) Which of the following is NOT a benefit to an individual purchasing a mutual fund?A) reduced riskB) lower transactions costsC) free-ridingD) diversificationAnswer: CAACSB: Analytical Thinking5) Financial intermediaries develop ________ in things such as computer technology whichallows them to lower transactions costs.A) expertiseB) diversificationC) regulationsD) equityAnswer: AAACSB: Information Technology6) Financial intermediaries' low transaction costs allow them to provide ________ services that make it easier for customers to conduct transactions.A) liquidityB) conductionC) transcendentalD) equitableAnswer: AAACSB: Reflective Thinking7) How does a mutual fund lower transactions costs through economies of scale?Answer: The mutual fund takes the funds of the individuals who have purchased shares and uses them to purchase bonds or stocks. Because the mutual fund will be purchasing large blocks of stocks or bonds they will be able to obtain them at lower transactions costs than the individual purchases of smaller amounts could.AACSB: Reflective Thinking8.3 Asymmetric Information: Adverse Selection and Moral Hazard1) A borrower who takes out a loan usually has better information about the potential returns and risk of the investment projects he plans to undertake than does the lender. This inequality of information is calledA) moral hazard.B) asymmetric information.C) noncollateralized risk.D) adverse selection.Answer: BAACSB: Reflective Thinking2) The presence of ________ in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets.A) noncollateralized riskB) free-ridingC) asymmetric informationD) costly state verificationAnswer: CAACSB: Analytical Thinking3) The problem created by asymmetric information before the transaction occurs is called________, while the problem created after the transaction occurs is called ________.A) adverse selection; moral hazardB) moral hazard; adverse selectionC) costly state verification; free-ridingD) free-riding; costly state verificationAnswer: AAACSB: Application of Knowledge4) If bad credit risks are the ones who most actively seek loans then financial intermediaries face the problem ofA) moral hazard.B) adverse selection.C) free-riding.D) costly state verification.Answer: BAACSB: Reflective Thinking5) The problem faced by the lender that the borrower may take on additional risk after receiving the loan is calledA) adverse selection.B) moral hazard.C) transactions costs.D) diversification.Answer: BAACSB: Analytical Thinking6) An example of the ________ problem would be if Brian borrowed money from Sean in order to purchase a used car and instead took a trip to Atlantic City using those funds.A) moral hazardB) adverse selectionC) costly state verificationD) agencyAnswer: AAACSB: Ethical understanding and reasoning abilities7) The analysis of how asymmetric information problems affect economic behavior is called________ theory.A) unevenB) parallelC) principalD) agencyAnswer: DAACSB: Application of Knowledge8.4 The Lemons Problem: How Adverse Selection Influences Financial Structure1) The "lemons problem" exists because ofA) transactions costs.B) economies of scale.C) rational expectations.D) asymmetric information.Answer: DAACSB: Application of Knowledge2) Because of the "lemons problem" the price a buyer of a used car pays isA) equal to the price of a lemon.B) less than the price of a lemon.C) equal to the price of a peach.D) between the price of a lemon and a peach.Answer: DAACSB: Analytical Thinking3) Adverse selection is a problem associated with equity and debt contracts arising fromA) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.B) the lender's inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults.C) the borrower's lack of incentive to seek a loan for highly risky investments.D) the lender's inability to restrict the borrower from changing his behavior once given a loan. Answer: AAACSB: Reflective Thinking4) The ________ problem helps to explain why the private production and sale of information cannot eliminate ________.A) free-rider; adverse selectionB) free-rider; moral hazardC) principal-agent; adverse selectionD) principal-agent; moral hazardAnswer: AAACSB: Reflective Thinking5) The free-rider problem occurs becauseA) people who pay for information use it freely.B) people who do not pay for information use it.C) information can never be sold at any price.D) it is never profitable to produce information.Answer: BAACSB: Reflective Thinking6) In the United States, the government agency requiring that firms that sell securities in public markets adhere to standard accounting principles and disclose information about their sales, assets, and earnings is theA) Federal Communications Commission.B) Federal Trade Commission.C) Securities and Exchange Commission.D) Federal Reserve System.Answer: CAACSB: Analytical Thinking7) Government regulations require publicly traded firms to provide information, reducingA) transactions costs.B) the need for diversification.C) the adverse selection problem.D) economies of scale.Answer: CAACSB: Analytical Thinking8) A lesson of the Enron collapse is that government regulationA) always fails.B) can reduce but not eliminate asymmetric information.C) increases the problem of asymmetric information.D) should be reduced.Answer: BAACSB: Reflective Thinking9) That most used cars are sold by intermediaries (i.e., used car dealers) provides evidence that these intermediariesA) have been afforded special government treatment, since used car dealers do not provide information that is valued by consumers of used cars.B) are able to prevent potential competitors from free-riding off the information that they provide.C) have failed to solve adverse selection problems in this market because "lemons" continue to be traded.D) have solved the moral hazard problem by providing valuable information to their customers. Answer: BAACSB: Reflective Thinking10) Analysis of adverse selection indicates that financial intermediaries, especially banksA) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than is direct finance.B) despite their success in overcoming free-rider problems, nevertheless play a minor role in moving funds to corporations.C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds.D) must buy securities from corporations to diversify the riskthat results from holdingnon-tradable loans.Answer: AAACSB: Reflective Thinking11) The concept of adverse selection helps to explain all of the following EXCEPTA) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.B) why indirect finance is more important than direct finance as a source of business finance.C) why direct finance is more important than indirect finance as a source of business finance.D) why the financial system is so heavily regulated.Answer: CAACSB: Reflective Thinking12) As information technology improves, the lending role of financial institutions such as banks shouldA) increase somewhat.B) decrease.C) stay the same.D) increase significantly.Answer: BAACSB: Information Technology13) External financing by ________ should be more important in developing countries than in industrialized countries because information about private firms is more difficult to collect in developing countries.A) financial intermediariesB) bondsC) stockD) direct lendingAnswer: AAACSB: Reflective Thinking14) That only large, well-established corporations have access to securities marketsA) explains why indirect finance is such an important source of external funds for businesses.B) can be explained by the problem of moral hazard.C) can be explained by government regulations that prohibit small firms from acquiring funds in securities markets.D) explains why newer and smaller corporations rely so heavily on the new issues market for funds.Answer: AAACSB: Reflective Thinking15) Because of the adverse selection problemA) good credit risks are more likely to seek loans causing lenders to make a disproportionate amount of loans to good credit risks.B) lenders may refuse loans to individuals with high net worth, because of their greater proclivity to "skip town."C) lenders are reluctant to make loans that are not secured by collateral.D) lenders will write debt contracts that restrict certain activities of borrowers.Answer: CAACSB: Reflective Thinking16) Net worth can perform a similar role toA) diversification.B) collateral.C) intermediation.D) economies of scale.Answer: BAACSB: Analytical Thinking17) The problem of adverse selection helps to explainA) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from securities markets.B) why collateral is an important feature of consumer, but not business, debt contracts.C) why direct finance is more important than indirect finance as a source of business finance.D) why lenders refuse loans to individuals with high net worth.Answer: AAACSB: Reflective Thinking18) The concept of adverse selection helps to explainA) why collateral is not a common feature of many debt contracts.B) why large, well-established corporations find it so difficult to borrow funds in securities markets.C) why financial markets are among the most heavily regulated sectors of the economy.D) why stocks are the most important source of external financing for businesses.Answer: CAACSB: Reflective Thinking19) Tools to help solve the adverse selection problem in financial markets include all of the following EXCEPTA) diversification.B) government regulations to increase information.C) the use of financial intermediaries.D) the private production and sale of information.Answer: AAACSB: Application of Knowledge20) How does collateral help to reduce the adverse selection problem in credit market? Answer: Collateral is property that is promised to the lender if the borrower defaults thus reducing the lender's losses. Lenders are more willing to make loans when there is collateral that can be sold if the borrower defaults.AACSB: Reflective Thinking8.5 How Moral Hazard Affects the Choice Between Debt and Equity Contracts1) Equity contractsA) are claims to a share in the profits and assets of a business.B) have the advantage over debt contracts of a lower costly state verification.C) are used much more frequently to raise capital than are debt contracts.D) are not subject to the moral hazard problem.Answer: AAACSB: Application of Knowledge2) A problem for equity contracts is a particular type of ________ called the ________ problem.A) adverse selection; principal-agentB) moral hazard; principal-agentC) adverse selection; free-riderD) moral hazard; free-riderAnswer: BAACSB: Reflective Thinking3) Moral hazard in equity contracts is known as the ________ problem because the manager of the firm has fewer incentives to maximize profits than the stockholders might ideally prefer.A) principal-agentB) adverse selectionC) free-riderD) debt deflationAnswer: AAACSB: Reflective Thinking4) Managers (________) may act in their own interest rather than in the interest of the stockholder-owners (________) because the managers have less incentive to maximize profits than the stockholder-owners do.A) principals; agentsB) principals; principalsC) agents; agentsD) agents; principalsAnswer: DAACSB: Ethical understanding and reasoning abilities5) The principal-agent problemA) occurs when managers have more incentive to maximize profits than the stockholders-owners do.B) in financial markets helps to explain why equity is a relatively important source of finance for American business.C) would not arise if the owners of the firm had complete information about the activities of the managers.D) explains why direct finance is more important than indirect finance as a source of business finance.Answer: CAACSB: Reflective Thinking6) The principal-agent problem would not occur if ________ ofa firm had complete information about actions of the ________.A) owners; customersB) owners; managersC) managers; customersD) managers; ownersAnswer: BAACSB: Reflective Thinking7) The recent Enron and Tyco scandals are an example ofA) the free-rider problem.B) the adverse selection problem.C) the principal-agent problem.D) the "lemons problem."Answer: CAACSB: Ethical understanding and reasoning abilities8) The name economists give the process by which stockholders gather information by frequent monitoring of the firm's activities isA) costly state verification.B) the free-rider problem.C) costly avoidance.D) debt intermediation.Answer: AAACSB: Application of Knowledge9) Because information is scarceA) helps explain why equity contracts are used so much more frequently to raise capital than are debt contracts.B) monitoring managers gives rise to costly state verification.C) government regulations, such as standard accounting principles, have no impact on problems such as moral hazard.D) developing nations do not rely heavily on banks for business financing.Answer: BAACSB: Reflective Thinking10) Government regulations designed to reduce the moral hazard problem includeA) laws that force firms to adhere to standard accounting principles.B) light sentences for those who commit the fraud of hiding and stealing profits.C) state verification subsidies.D) state licensing restrictions.Answer: AAACSB: Reflective Thinking11) One financial intermediary in our financial structure that helps to reduce the moral hazard from arising from the principal-agent problem is theA) venture capital firm.B) money market mutual fund.C) pawn broker.D) savings and loan association.Answer: AAACSB: Application of Knowledge12) A venture capital firm protects its equity investment from moral hazard through which of the following means?A) It places people on the board of directors to better monitor the borrowing firm's activities.B) It writes contracts that prohibit the sale of an equity investment to the venture capital firm.C) It prohibits the borrowing firm from replacing itsmanagement.D) It requires a 50% stake in the company.Answer: AAACSB: Reflective Thinking13) One way the venture capital firm avoids the free-rider problem is byA) prohibiting the sale of equity in the firm to anyone except the venture capital firm.B) prohibiting members from serving on the board of directors.C) prohibiting the borrowing firm from replacing management.D) requiring collateral equal to the value of the borrowed funds.Answer: AAACSB: Reflective Thinking14) Equity contracts account for a small fraction of external funds raised by American businesses becauseA) costly state verification makes the equity contract less desirable than the debt contract.B) of the reduced scope for moral hazard problems under equity contracts, as compared to debt contracts.C) equity contracts do not permit borrowing firms to raise additional funds by issuing debt.D) there is no moral hazard problem when using a debt contract.Answer: AAACSB: Reflective Thinking15) Debt contractsA) are agreements by the borrowers to pay the lenders fixeddollar amounts at periodic intervals.B) have a higher cost of state verification than equity contracts.C) are used less frequently to raise capital than are equity contracts.D) never result in a loss for the lender.Answer: AAACSB: Application of Knowledge16) Since they require less monitoring of firms, ________ contracts are used more frequently than ________ contracts to raise capital.A) debt; equityB) equity; debtC) debt; loanD) equity; stockAnswer: AAACSB: Reflective Thinking17) Solutions to the moral hazard in equity contracts include all of the following EXCEPTA) government regulations to increase information.B) the use of financial intermediaries.C) the use of debt contracts.D) government ownership of resources.Answer: DAACSB: Application of Knowledge18) Explain the principal-agent problem as it pertains to equity contracts.Answer: The principals are the stockholders who own most of the equity. The agents are the managers of the firm who generally own only a small portion of the firm. The problemoccurs because the agents may not have as much incentive to profit maximize as the stockholders. AACSB: Reflective Thinking8.6 How Moral Hazard Influences Financial Structure in Debt Markets1) Although debt contracts require less monitoring than equity contracts, debt contracts are still subject to ________ since borrowers have an incentive to take on more risk than the lender would like.A) moral hazardB) agency theoryC) diversificationD) the "lemons" problemAnswer: AAACSB: Reflective Thinking2) A debt contract is incentive compatibleA) if the borrower has the incentive to behave in the way that the lender expects and desires, since doing otherwise jeopardizes the borrower's net worth in the business.B) if the borrower's net worth is sufficiently low so that the lender's risk of moral hazard is significantly reduced.C) if the debt contract is treated like an equity.D) if the lender has the incentive to behave in the way that the borrower expects and desires. Answer: AAACSB: Reflective Thinking3) High net worth helps to diminish the problem of moral hazard problem byA) requiring the state to verify the debt contract.B) collateralizing the debt contract.C) making the debt contract incentive compatible.D) giving the debt contract characteristics of equity contracts.。

《剑桥金融财务英语》重点篇章简答题

5When people found or start companies, they draw up or prepare Articles of Association and a Memorandum of Association.The Articles of Association state:（公司规章制度；对内）1.the right and duties of the shareholders and directors2.the relationships among different classes of shareholder3.the relationships between shareholders and the company and its directors.The Memorandum of Association state:（公司注册证，组织大纲；对外）1.the company’s name2.the location of the company’s registered office - where to send official documents3.the company’s purpose - its aims or objectives4.the authorized share capital - the maximum share capital it can have.32Share prices depend on a number of factors:（股票价格取决于）1.the financial situation of the company2.the situation of the company3.the state of the economy in general4.the beliefs of investors - whether they believe the share price will rise or fall, and whether they believe other investors will think this.Prices can go up or down and the question for investors - and speculators - is:can these price changes be predicted, or seen in advance? When price-sensitive information - news that affects a company’s value - arrives, a share price will change. But no one knows when or what that information will be. So information about past prices will not tell you what tomorrow’s price will be.There are different theories about whether share price changes can be predicted:（股价变动是否可以预测）1.The random walk hypothesis. Prices move along a ‘random walk’- this means day-to-day changes are completely random or unpredictable.2.The efficient market hypothesis. Share prices always accurately or exactly reflect all relevant information. It is therefore a waste of time to attempt to discover patterns or trends - general changes in behavior - in price movements.3.Technical analysis. Technical analysts are people who believe that studying past share prices does allow them to forecast future price changes. They believe that market prices result from the psychology of investors rather than from real economic values, so they look for trends in buying and selling behavior, such as the ‘head and shoulders’ pattern.4.Fundamental analysis. This is the opposite of technical analysis: it ignores the behavior of investors and assumes that a share has a true or correct value, which might be different from its stock market value. This means that markets are not efficient. The true value reflects the present value of the future income from dividends.21Financial institution（金融机构）类型：Retail banks or commercial banks (individuals and small companies):received deposits; made loans.Investment banks(big company):gave financial advice; raised capital;organized mergers and takeover bids.Insurance companies:provided life insurance and pensions.Building societies:specialized in mortgages. Many have now become normal commercial banks.26Conventional banks（传统银行）1.Pay interest to depositors2.Charge interest to borrowers3.Lend money to finance personal consumption goodsIslamic banks（伊斯兰银行）1.Give no return on current accounts; share profits with holders of savings accounts and investment accounts2.Share borrowers’ profits (or losses)3.Buy items for personal customers with a leasing or hire-purchase arrangement18Companies’ price are influenced by production and distribution costs, both direct and indirect. （加成法）Mark-up or cost-plus pricing: some firms just calculate the unit cost and add a percentage.（市场渗透法）Market penetration pricing: some companies launch products at a price that only gives them a very small profit, because they want a big market share. This allows them to make profits later because of economies of scale.（市场撇脂定价）Market skimming: some customers will pay almost any price, so the company can charge a really high price, then lower it to reach other market segments.（声望定价）Prestige pricing or image pricing: products positioned at the luxury end of a market need to have a high price:the target customers probably won’t buy them if they think the price is too low.（随行就市定价）Going-rate pricing: if a product is almost identical to competitors’ products, companies might charge the same price.（亏本销售定价）Loss-leader pricing: retailers often offer some items at a very low price that isn’t profitable, to attract customers who then buy more products which are profitable.（尾数定价）Odd pricing or odd-even pricing: many producers and retailers believe a customer sees a price of 29.95 as in the 20 price range rather than the 30 one.（价格变动）Elasticity: demand is elastic if sales respond directly to price variations. If sales remain the same after a change in price, demand is inelastic.30Categories of stocks and shares:（股票的类型）Blue chips: Stocks in large companies with a reputation for quality, reliability and profitability.More than two-third of all blue chips in industrialized countries are owned by institutional investors such as insurance companies and pension funds.Growth stocks: Stocks that are expected to regularly rise in value. Most technology companies are growth stocks, and don’t pay dividends, so the shareholders’equity or owners’equity increases. This causes the stock price to rise.Income stocks: Stocks that have a history of paying consistently high dividends.Defensive stocks: Stocks that provide a regular dividends and stable earnings, but whose value is not expected to rise of fall very much.Value stock: Stocks that investors believe are currently trading for less than they are worth - when compared with the companies’ assets.41Discounted cash flows（贴现现金流）We usually calculate the discounted cash flow value of an investment. This means discounting or reducing future cash flows to get their present values. This is because the value of money decreases over time. Firstly, there’s nearly always inflation, so cash will have lower purchasing power in the future. Secondly, if you had the money now, you could get income by using or investing it. The return we could get by investing the money in other ways id the opportunity cost of capital. So waiting for money is also a cost. This is the time value of money: how much more it is worth to receive money now rather than in the future.43Balance of payments（国际收支平衡）Imports are the goods or services bought from a foreign country. Exports are the goods or services sold to a foreign country.A country that exports more goods than it imports has a positive balance of trade or a trade surplus. The opposite is a negative balance of trade or a trade deficit. Trade in goods is sometimes called visible trade. Services such as banking, insurance and tourism are sometimes called invisible imports and exports. Adding invisibles to the balance of trade gives a country’s balance of payments.45Documentary credits （跟单信用证）have a standard form. They generally contain:1.a short description of the goods2.a list of shipping documents required to obtain payment3.a final shipping date4.a final date for presenting the documents to the bank.Export ers have to prepare a number of documents to go with the shipment or transportation of goods.（出口单据）1.The commercial invoice contains details of the goods2.The bill of lading is a document signed by the carrier or transporter confirming that the goods have been received for shipment; it contains a brief description of the goods and details of where they are going.3.The insurance certificate also describes the goods and contains details of how to claim if they are lost or damaged in transit - while being transported.4.The certificate of origin states where the goods come from.5.Quality and weight certificate, issued by private inspection and testing companies, may be necessary, confirming that these are the correct goods in the right quantity.6.An export license giving the right to sell particular goods abroad is necessary in some cases.48The business cycle（商业周期）All market economies have periods when consumption - spending on goods and services - rises. Consumers buy more, companies invest more, and production, income, profits and employment increase. These periods are always followed by periods when spending and investing fall, and unemployment rises. This is the business cycle.A period during which economic activity increases and the economy is expanding is an upturn. If it lasts a long time it is called a boom. The highest point of the business cycle is a peak, which is followed by a downturn, during which the amount of economic activity decreases. If the economy keeps contracting for more than 6 months, the downturn is called a recession. A serious, long-lasting recession is called a depression. The lowest point of the business cycle is a trough, which is followed by a recovery, when economic activity increases again, and a new cycle begins. Fiscal policy（财政政策）Governments and central banks use fiscal policy, which involves changing the level of government expenditure and taxation to try to limit the extent of the business cycle.If an economy is moving into a recession, the government might have a reflationary fiscal policy. This means trying to stimulate the economy by increasing government spending, or by cutting level of direct or indirect tax so that individuals and companies have more money to spend.If an economy is overheating - expanding too quickly - it means that industry is working at full capacity and producing as much as it possible can. Because demand is greater than supply, leading to rising prices and inflation, the government might have a deflationary fiscal policy. This means trying to cool down the economy: reducing the amount of economic activity by raising tax rates or cutting government expenditure. This reduces the level of demand in the economy and helps to reduce inflation.Monetary policy（货币政策）Governments or central banks can also use monetary policy - changing interest rates and the level of the money supply - to influence the level of economy activity.They can boost or increase economic activity if the economy is a downturn by reducing interest rates and allowing the rate of growth of the money supply to increase.If the economy is growing too fast and causing inflation, they can slow it down by increasing interest rates and reducing the rate of growth of the money supply.50Business plans（商业计划）begin with a summary, often called an Executive Summary, which explains in one or two pages:Type: what sort of company it isFeatures: what the product or service is, and what is special about itManagers: who the managers areCapital: how much money you need, and what you will use it for.The company, the product and the market（介绍公司；准备出售的产品；介绍管理团队）If the company already exists, the first chapter of the business plan explains how it was started and how it has grown, and gives a history of sales and profits. It describes the company today, and the plans for the future.The second chapter describes what you already sell or want to sell. It explains what differentiates the product or service from other existing ones - what makes it unique. It focuses on the benefits or advantages for customers - how it will improve people’s live!The chapter on the market describes the industry you operate in, the market segments, the other firms in the market, changes in the industry, and projected trends and technological opportunities. It gives details of your marketing strategy(策略), including sales tactics- the ways you plan to achieve sales, advertising publicity and sales promotions - incentives to encourage customers to buy.The chapter on the management team gives details about the most important staff. The chapter on strategy outlines your strategies for marketing, pricing, distribution, sales, etc, and how you are going to implement.22Investment banking（投行）Main business: acting as intermediaries；consulting services；venture capital；mergers and acquisitions；corporate financing；asset management；Securities underwriting and broking23Central banking（央行）Main business: Keep reserves；Print and issue currency；rediscount；foreign exchange；Collect and publish financial data；Supervise banking system；Clearing cheques；Keep reserves24Interest rates and monetary policy（利率和货币政策）An interest rate is the cost of borrowing money: the percentage of the amount of a loan paid by the borrower to the lender for the use of the lender’s money. A country’s minimum interest rate is usually set by the central bank, as part of monetary policy, designed to keep inflation low. This can be achieved if demand is nearly the same as supply.If interest rates set too low, the demand for goods and services grows faster than the market’s ability to supply them. This causes prices to rise so that inflation occurs.If interest rates set too high, this lowers borrowing and spending. This brings down inflation, but also reduces output and the employment.7.Accounting policies and standards（会计政策和标准）Valuation（估值）a. Publish the value of companyb. Calculate profits or losses: so do subject=so it is the same with subjectMeasurement（计量）Choose the accounting policiesConsistency principle: Statement of Accounting Policiesa true and fair viewHistorical cost（历史成本）Record original purchase price of assets based on going concern postulateInflation accounting（通货膨胀会计）Current replacement cost based on inflation accounting8Assumption（四大假设）Separate entity；Time-period；Going concern；Unit-of-measurePrinciples （六个原则）Full-disclosure；Materiality；Conservatism；Objectivity；Revenue recognition；Matching17Although cost accounting allows companies to calculate production costs, pricing decisions also depend on:1.the level of demand2.the price of competitors’ products3.the company’s financial situation4.the company’s objectives - the aims it wants to accomplish5.the company’s marketing policies - whether it is interested in maximizing sales or maximizing profit.44An exchange rate is the price at which one currency can be exchanged for another. In theory, exchange rates should be at the level that gives purchasing power parity. This means that the cost of a given selection of goods and services would be the same in different countries. So if the price level in the country increases because of inflation, its currency should depreciate（贬值）.In fact, PPP doesn’t work, as exchange rates can change due to currencyspeculation. Financial institutions, companies and rich individuals all buy currencies, looking for high interest rates or short-term capital gains if a currency appreciates（升值）. This means exchange rates change due to speculation rather than PPP. Over 95% of the world’s currency transactions are purely speculative, and not related to trade. Banks and currency traders make consider able profits from the spread between a currency’s buying and selling prices.34Financial futures（金融期货）Currency futures and forwards are contracts that specify the price at which a certain currency will be bought or sold on a specified date.Interest rate futures are agreements between banks and investors and companies to issue fixed income securities at a future date.Stock futures fix a price for a stock and stock index futures fix a value for an index on a certaindate. They are alternatives to buying the stocks or shares themselves.。

FinancialEnglish《金融英语》内容结构

Moneyis generally accepted in the payment for goods and services or in the repayment of debt. TypesFunctionsInterest and InterestMoney SupplyChina ‘s Monetary System(1)Narrow measure of money :M0 and M1Include currency and demand deposit used for everyday expenditures.(2)Broad measure of money :M2 and M3Narrow measure of money adds time deposits and savings accountand certain other financial assets(1)Commodity Money: is money whose value comes from a commodity out of which it ismade.(2)Representative Money :representative full –bodied money refers to paper money fullybacked by a precious metal.(3)Credit Money: is issued is based on the credit of its issuer and credit process.(4)Electronic Money :refers to depository money that is stored and processed throughcomputer 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 the value of goods andservices exchanged.(3)Store value :have some functions :save purchasing power, depreciates with inflation,more liquid, standard of deferred paymentInterest is a fee paid onborrowed assets.Interest RateInterest Rate refers tothe ratio of the interestformed during the periodof borrowing and lendingto the principal of thegranted loan.(1)Simple interest: refers to interest earned only on the principal ofthe initial investment.Formula: I = P R n S = P + 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 toprincipal for the calculation of interest.Formula: s = P (1+r) ^ n I=S-P(3)Nominal and real interest rates. Real interest rates is approximatelythe nominal interest rate minus the inflation rate.(4)Official and market interest rates. The former is set by the centralbanks or monetary authorities.Market interest rate is whollydetermined by the demand and supply of funds.refers to the collection ofmoney in an economyincluding the volume ofcurrency in circulation andthe volume of deposits atany point of time.1.Renminbi is the legal tender and had norelation to gold,nor any foreign currencies.2.Renminbi is the sole legal money in China.3.The issuance of Renminbi is highlyconcentrated and the People’s Bank of Chinaholds the right of issuance of Renminbi.Chapter 1Chapter 2Foreign ExchangeDefinition :In the first place, it means the system utilized financ ing international payment.In the second place, it means the media used to discharge international obligations.T he third, means the rates at which foreign exchange is quoted.Foreign exchange rateDefinition:It is the value of a foreign nation’scurrency in terms of the home nation’s currency.QuotationThe spot exchange rate: refers to thecurrent exchange rateThe forward exchange rate:refers toan exchange rate that is quoted and tradedTypesDirect quotation:1 foreign currency unit =X home currencunitsIndirect quotation:1 home currency unit=X foreign currency unit foreign exchange transactionsDefinition:are purchases and sales of foreignexchanges with a purpose to meet the needs of acertain economic activity.TypesSpot transaction:purchase and sale ofFX with delivery and payment to takeplace no more than two working daysafter the date of deal.Forward transaction:is the FXtransaction that is settled on anypre-agreed date three or more businessdays after the deal date.Swap transaction: is the simultaneouspurchase and sales of a given of FX for twodifferent value date.Foreign exchange futurescontract: is an agreement between twoparties to buy/sell a particular currency at aparticular price on a particular future date,as specified in a standardized contractcommon to all partic ipants in that currencyfutures exchange. Which is rarely buyingor selling anything 。

(完整版)金融英语教学大纲201710

《金融英语》教学大纲一、课程基本信息1、熟悉金融行业基本的业务、常用术语及一般的业务程序与原理；2、掌握一定的金融英语词汇，提高学生的英语运用能力，能听懂金融行业日常工作会话，能用英文介绍金融行业的基本概念、基本业务和基础理论，能阅读与金融业务有关的英文资料；3、培养和提高学生的综合职业能力和素质。

三、课程目标、教学目标与毕业要求对应关系Chapter 1 International Monetary Systems1、基本要求掌握与货币有关的英语专业词汇；能用英文对货币发展史进行简单介绍。

2、主要内容Text 1 History of Modern Global Monetary OrdersText 2 International Monetary Systems and Historical OverviewListening: Call for a “New Bretton Woods”Oral English practice:：The correlation between a country’s economic power and its role in the international financial system.3、作业：课后习题Chapter 2 The International Monetary Fund1、基本要求了解国际货币基金组织的基本职能；掌握本单元英语生词；能用英文简单介绍国际货币基金组织的历史、成员及基本职能。

2、主要内容Text 1 An Overview of the IMFText 2 The Membership of the IMFListening: Tackling Global ChallengesOral English practice:: How should the IMF help low-income countries?3、作业：课后习题Chapter 4 Balance of Payments1、基本要求掌握本单元生词；理解收支平衡的含义；能用英文对收支平衡、收支顺差、收支逆差、赤字等概念进行介绍2、主要内容Text 1 China's Balance of PaymentsText 2 Balance of PaymentsListening: Current Account Deficit? Not Necessarily a Bad ThingOral English practice:: The disadvantages of current account deficits?3、作业：课后习题Chapter 5 Foreign Exchange and Exchange Rate1、基本要求掌握与外汇和汇率有关的英语专业词汇；了解外汇在国际金融与国际贸易中的重要性；能用英语对外汇汇率标价方法进行介绍。

金融学(博迪)英文版课后习题答案

金融学(博迪)英文版课后习题答案CONTENTSChapter 1: Financial Economics 1-1Chapter 2: Financial Markets and Institutions 2-1Chapter 3: Managing Financial Health and Performance 3-1Chapter 4: Allocating Resources Over Time 4-1Chapter 5: Household Saving and Investment Decisions 5-1Chapter 6: The Analysis of Investment Projects 6-1Chapter 7: Principles of Market Valuation 7-1Chapter 8: Valuation of Known Cash Flows: Bonds 8-1Chapter 9: Valuation of Common Stocks 9-1Chapter 10: Principles of Risk Management 10-1Chapter 11: Hedging, Insuring, and Diversifying 11-1Chapter 12 Portfolio Opportunities and Choice 12-1Chapter 13: Capital Market Equilibrium 13-1Chapter 14: Forward and Futures Markets 14-1Chapter 15: Markets for Options and Contingent Claims 15-1Chapter 16: Financial Structure of the Firm 16-1Chapter 17: Real Options 17-1CHAPTER 1 – Financial EconomicsEnd-of-Chapter ProblemsDefining Finance1. What are your main goals in life? How does finance play a part in achieving those goals? What are themajor tradeoffs you face?SAMPLE ANSWER:Finish schoolGet good paying job which I likeGetmarried and have childrenOwn my own homeProvide for familyPay for children’s educationRetireHow Finance Plays a Role:SAMPLE ANSWER:Finance helps me pay for undergraduate and graduate education and helps me decide whether spending themoney on graduate education will be a good investment decision or not.Higher education should enhance my earning power and ability to obtain a job I like.Once I am married and have children I will have additional financial responsibilities (dependents) and Iwill have to learn how to allocate resources among individuals in the householdand learn how to set aside enoughmoney to pay for emergencies, education, vacations etc. Finance also helps me understand how to manage risks suchas for disability, life and health.?Finance helps me determine whether the home I want to buy is a good value or not. The study of financealso helps me determine the cheapest source of financing for the purchase of that home.Finance helps me determine how much money I will have to save in order to pay for my children’seducation as well as my own retirement.Major Tradeoffs:SAMPLE ANSWERSpend money now by going to college (and possibly graduate school) but presumably make more moneyonce I graduate due to my higher education.Consume now and have less money saved for future expenditures such as for a house and/or car or savemore money now but consume less than some of my friends。

chapter8 Financial Structure 货币金融课件

Sources of External Funds for Nonfinancial Businesses (1970-2000)
Ⅰ Basic Puzzles About Financial Structure Throughout the World
80.0
70.0
60.0
50.0
40.0
30.0
8、Debt contracts typically are extremely complicated （极为复杂）legal documents that place substantial restrictions（无数限制） on the behavior of the borrower.
ⅡTransaction Cost and Financial Structure
20.0
10.0
0.0 (10.0)
1992
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2000
2001
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中国非金融企业外部资金来源 (1992-2008)
数据来源：根据《中国金融年鉴》中历年中国资金流量表计算。
贷款债券股票
Ⅰ Basic Puzzles About Financial Structure Throughout the World
4、Banks are the most important source of external funds used to finance businesses.
Ⅰ Basic Puzzles About Financial Structure Throughout the World

《会计专业英语》习题答案人大版Chapter 8

Chapter 8 Financial Statements and Financial Statement AnalysisMultiple Choice Questions1. A2. C3. B4. B5. D6. C7. B8. D9. A 10. B 11. A 12. C 13.D 14. A 15. A 16. A 17. B 18. B 19. B 20. DDiscussion Questions1. Is the measurement of net income absolutely accurate? Why or why not?The measurement of net income is not absolutely accurate due to the assumptions and estimates in the accounting process. An Income Statement has certain limitations. For example, the amounts shown for depreciation expense are based upon estimates of the useful lives of the company’s tool, equipment, and building. In addition, the Income Statement includes only those events that have been evidenced by actual business transactions. Perhaps during the year, the company’s advertising has caught the attention of many potential customers, who may be the sources of future income. However, the Income Statement cannot reflect the unrealized revenue. Only after the real transactions take place, can the sales revenues be recognized.2. What are the three types of business activities? Give examples of each type of activity.The three types of business activities include operating, investing, and financing activities. Operating activities include the cash effects of transactions that create revenues and expenses in normal course of business. This category is the most important. It shows the cash provided by company operations, which is generally considered to be the best measure of a company’s ability to generate sufficient cash to continue as a going concern. They include sales of goods and services, payments to supplies of merchandise and services.Investing activities include the cash effects of transactions involving plant assets, intangible assets, and investments. They include purchase of property, plant, andequipment, investments in debt or equity securities of other entities.Financing activities involve liability and owners’ equity items. They include: (1) obtaining resources from owners and providing them with a return on their investments, and (2) borrowing money from creditors and repaying the amounts borrowed.3. What types of information are presented in the notes to the financial statements?A set of financial statements is normally accompanied by several notes. Notes to the financial statements are the means of explaining the items presented in the main body of financial statements. Notes disclose information useful in interpreting the statements and are an integral part of the financial statements.Many items are disclosed in notes accompanying the financial statements. Among the most useful are the followings:(1) Accounting policies and methods;(2) Unused lines of credit;(3) Significant commitments and loss contingencies;(4) Dividends in arrears;(5) Assets pledged to secure specific liabilities;(6) Changes in accounting policies and methods.4. Distinguish between trend change analysis and component percentage analysis. Which will be better suited for analyzing the changes in sales over several years?Trend changes are the changes in financial statement items from a base year to the following or preceding years. To compute trend change, a base year is firstly selected and each item in the financial statements for the base year is given a weight of 100 percent. Then, each item in the financial statements for the following or preceding years is expressed as a percentage of the base-year amount.Component percentage analysis is the proportional expression of each financial statement item in a given period to a base amount within the financial statement.Trend change analysis is better for analyzing the changes in sales over several years.5. Explain the ratios used to evaluate profitability. Explain briefly how each is computed.Profitability ratios measure the degree of success or failure of a company in a given year. Usually the key ratios include gross profit ratio, profit margin on sales, return on assets, return on equity, earnings per share, price-earnings ratio, and payout ratio.(1) Gross profit ratio.Gross profit ratio is computed by dividing gross profit by net sales. Gross profit (also known as gross margin) is the difference between net sales and the cost of goods sold.Gross profit = Net sales - Cost of goods soldGross profit ratio = Gross profitNet sales(2) Profit margin on sales.Profit margin on sales is computed as dividing net income by net sales. Net income is the difference between net sales and all expenses (including cost of goods sold). A company can improve its profit margin on sales by increasing its gross profit rate and/or by controlling its operating expense and other expenses.Profit margin on sales = Net incomeNet sales(3) Return on assets (ROA).ROA is computed by dividing net income by average total assets. Average total assets are computed by adding the beginning and ending values of total assets and dividing the total by two.ROA = Net incomeAverage total assets(4) Return on common owners equity (ROE).ROE equals net income less preferred dividends, divided by average common owners’ equity. Average common owners’ equity is computed by adding the beginning and ending values of total common owners’ equity and dividing the total by two.ROE = Net income-PreferreddividendsAverage common owners’ equity(5) Earnings per share (EPS).EPS equals net income less preferred dividends, divided by weighted-average number of shares outstanding in the same year. The weighted-average number of shares outstanding for the year is determined by multiplying the number of shares outstanding by the fraction of the year in which the number of shares outstanding remained unchanged.EPS = Net income-PreferreddividendsWeighted-average number ofshares outstanding(6) Price-earnings ratio (P/E ratio).P/E ratio is computed by dividing the current market price per share of a company’s stock by its annual EPS.P/E ratio = Stock price pershareEarning pershare(7) Payout ratio.Payout ratio equals cash dividends paid to common stockholders divided by net income (less preferred dividends).Payout ratio = Cash dividendsNet income -Preferreddividends6. Why might earnings per share be more significant to a stockholder in a large corporation than the total amount of net income?Earnings per share shows the dollars earned by each share of common stock. EPS equals net income less preferred dividends, divided by weighted-average number of shares outstanding in the same year. That is, a stockholder can know the net income he earns on the share of common stocks he owns.However, based on the total amount of net income, a stockholder cannot know how much he earns from his shares.7. Company C has a current ratio of 3 to pany D has a current ratio of 2 to 1. Does this mean that company C’s operating cycle is longer than company D’s? Why or why not?No, this does not mean that company C’s operating cycle is longer than company D’s. A company’s operating cycle is calculated as”Operating cycle=days to collect accounts receivable + days to sell inventoryDays to collect accounts receivable = 365Accounts receivable turnover rateDays to sell inventory = 365Inventory turnover rateAlthough Company C has a higher current ratio, we cannot calculate days to Days to collect accounts receivable and Days to sell inventory based on the information.8. Which ratio or ratios do you think should be of the greatest interest to:(1) A bank contemplating a short-term loan?A bank contemplating a short-term loan should be interested in such financial ratios as working capital, current ratio, quick ratio, and current cash debt coverage ratios.(2) An investor in common stock?An investor in common stock should be interested in such financial ratio as gross profit ratio, profit margin on sales, return on assets, return on equity, return on investment, earnings per share, price-earnings ratio, and payout ratio.9. Mr. Wang, the chief marketing officer, wants to reduce the selling price of his company’s products by 10% to increase market share. He says, “I know this will reduce our gross profit rate, but the increased number of units sold will make up for the lost margin.” Before this action is taken, what other factors does the company need to consider?Gross profit rate = Gross profitNet salesGross profit = Net sales - Cost of goods soldFrom the above, we know that gross profit rate is determined both by net sales and cost of goods sold. Reducing the net sales does not always lead to a reduced gross profit rate. If cost of goods sold greatly reduces, it is possible that gross profit ratio increases. If cost of goods sold increases, it is possible that the increased number of units sold will not make up for the lost margin. Therefore, before this action is taken, the company needs to consider cost of goods sold of his company’s products.10. Mr. Gao, the chief executive officer (CEO), is puzzled. During last year,his company experienced a net loss of $960,000, yet its cash increased by $540,000in the same year. Explain to the CEO how this could occur.Profit is the difference between revenues and expenses for a specified period oftime. If expenses are greater than revenues, the difference is net loss. Net income/netloss is measured on an accrual basis, while cash flows are measured on a cash basis.Under accrual basis of accounting, companies report revenue when earned, even if cashhas not been received, and they report expenses when incurred, even if cash has notbeen paid. As a result, net income/net loss is not the same as net cash.In this case, the net loss of $960,000 is the result of revenues minus expensesduring last year. It is measured on an accrual basis. However, the increased cash of $540,000 is the net cash from operating, investing, and financing activities during lastyear. It is measured on a cash basis. So, it is not strange that his company experienceda net loss of $960,000, and its cash increased by $540,000 in the same year.ProblemsProblem 8-1A condensed balance sheet for Company E prepared at the end of the year is as follows:AssetsCash $ 90,000Accounts receivable 168,000 Accounts payable 85,000 Inventory 350,000 Long-term liabilities 300,000 Prepaid expenses 75,000 Capital stock ($3 par) 330,000 Plant and equipment (net) 520,000 Retained earnings 563,000 Other assets 105,000Total $1,308,000 Total $1,308,000During the year the company earned a gross profit of $1,550,000 on sales of$3,200,000. Accounts receivables, inventory, and plant assets remained almost constantin amount through the year, so year-end figures may be used rather than the average.This company issued no preferred stocks. (红字标黄色是更正信息)RequiredCompute the following: (Carry to two decimal places)(1) Current ratioCurrent assets = cash + accounts receivable + inventory + prepaid expenses = $90,000+$168,000+$350,000+$75,000= $683,000Current liabilities = notes payable + accounts payable= $30,000 + $85,000= $115,000Current ratio = Current assets Current liabilities = $683,000$115,000 = 5.94(2) Quick ratioQuick assets = cash + accounts receivable= $90,000 + $168,000= $258,000Current liabilities = notes payable + accounts payable= $30,000 + $85,000= $115,000Quick ratio = Quick assets Current liabilities = $258,000$115,000 = 2.24(3) Working capitalCurrent assets = cash + accounts receivable + inventory + prepaid expenses = $90,000 + $168,000 + $350,000 + $75,000= $683,000Current liabilities = notes payable + accounts payable= $30,000 + $85,000= $115,000Working capital = current assets - current liabilities= $683,000 - $115,000= $568,000(4) Debt ratioTotal assets = $1,308,000Total liabilities = notes payable + accounts payable + long-term liabilities = $30,000 + $85,000 + $300,000= $415,000Debt ratio = Total liabilitiesTotal assets = $415,000$1,308,000= 31.72%(5) Accounts receivable turnover (all sales were on credit) Net sales = $3,200,000Average accounts receivable = $168,000Accounts receivable turnover rate = Net salesAverage (net) accounts receivable=$3,200,000$168,000=19.05 times per year(6) Inventory turnoverCost of goods sold = net sales – gross profit= $3,200,000 - $1,550,000= $1,650,000Average inventory = $350,000Inventory turnover rate = Cost of goods soldAverage (net) inventory= $1,650,000$350,000= 4.71 times per year(7) Profit margin on salesNet sales = $3,200,000Net income = retained earnings = $563,000Profit margin on sales = Net incomeNet sales = $563,000$3,200,000= 17.59%(8) Return on assetsNet income = retained earnings = $563,000 Average total assets = $1,308,000ROA = Net incomeAverage total assets = $563,000$1,308,000= 43.04%(9) Return on equity (this company issued no preferred stocks) Net income = retained earnings = $563,000Average common owners’ equity = capital stock + retained earnings= $330,000 + $563,000= $893,000ROE = Net income-Preferreddividends Average common owners’ equity = $563,000$893,000= 63.05%(10) Earnings per share (this company issued no preferred stocks)Net income = retained earnings = $563,000Weighted-average number of shares outstanding = $330,000/$3 = 110,000 sharesEPS = Net income-PreferreddividendsWeighted-average number ofshares outstanding =$563,000110,000= $5.12 per shareProblem 8-2The following selected data are from a recent annual report of company F. Dollar amounts are stated in millions.Beginning of the year End of the yearTotal current assets $9,230 $9,378Total current liabilities 4,836 5,902Total assets 31,125 33,561Total owners’ equity16,028 17,162Operating income 4,280Net income $3,735The company has long-term liabilities that bear interests at annual rate from 7 percent to 10 percent.Required1. Compute the company’s current ratio at: (1) the beginning of the year and, (2) the end of the year. (Carry to two decimal places)(1) Current ratio at the beginning of the yearTotal current assets = $9,230Total current liabilities = $4,836Current ratio = Current assetsCurrent liabilities = $9,230$4,836= 1.91(2) Current ratio at the end of the year Total current assets = $9,378Total current liabilities = $5,902Current ratio = Current assetsCurrent liabilities = $9,378$5,902= 1.592. Compute the company’s working capital at: (1) the beginning of the year and, (2) the end of the year. (Express dollar amounts in thousands)(1) Working capital at the beginning of the yearTotal current assets = $9,230Total current liabilities = $4,836Working capital = current assets - current liabilities= $9,230 - $4,836= $4,394(2) Working capital at the end of the yearTotal current assets = $9,378Total current liabilities = $5,902Working capital = current assets - current liabilities= $9,378 - $5,902= $3,4763. Is the company’s short-term, debt-paying ability improving or deteriorating? Company F’s short-term debt-paying ability has declined, as evidenced by its lower current ratio at the end of the year (1.59 vs. 1.91). The dollar amount of working capital has also decreased ($4,394 million to $3,476 million) which means that the company has a lesser ‘cushion’ between its currently-maturing obligations and its most liquid assets.4. Compute the company’s (1) return on average total assets and (2) return on average total owners’ equity. (Round the average assets and average equity to the nearest dollar and final computations to the nearest 1 percent)(1) Return on average total assetOperating income = $4,280Average total assets = ($31,125 + $33,561)/2 = $32,343ROA = Net incomeAverage total assets = $4,280$32,343= 13.23%(2) Return on average total owners’ equity Net income = $3,735Average owners’ equity = ($16,028 + $17,162)/2= $16,595ROE = Net income-Preferreddividends Average common owners’ equity = $3,735$16,595= 22.51%e. As an equity investor, do you think that company F’s management is utilizing the company’s resources in a reasonably efficient manner? Explain.Yes, company F’s management is using the company’s assets to generate a strong return on both assets (13.23%) and owners’ equity (22.51%), while maintaining strong liquidity with which to satisfy its obligations as they mature.Problem 8-3The following selected data for company M and company N for the year end are as follows:company M company NNet credit sales $1,600,000 $1,500,000Cost of goods sold 1,250,000 1,120,000Cash 175,000 89,000 Accounts receivable (net) 180,000 155,000 Inventory 72,000 218,000Current liabilities $210,000 $190,000Assume that the year-end balances shown for accounts receivable and for inventory also represent the average balances of these items throughout the year.Required1. For each of the two companies, compute the following:(1) Working capitalCompany M:Total current assets = cash + accounts receivable + inventory= $175,000 + $180,000 + $72,000= $427,000Total current liabilities = $210,000Working capital = current assets - current liabilities= $427,000 - $210,000= $217,000Company N:Total current assets = cash + accounts receivable + inventory= $89,000 + $155,000 + $218,000= $462,000Total current liabilities = $190,000Working capital = current assets - current liabilities= $462,000 - $190,000= $272,000(2) Current ratio Company M:Total current assets = $427,000 Total current liabilities = $210,000Current ratio = Current assetsCurrent liabilities = $427,000$210,000 = 2.03 Company N:Total current assets = $462,000 Total current liabilities = $190,000Current ratio = Current assetsCurrent liabilities = $462,000$190,000 = 2.43(3) Quick ratio Company M:Total quick assets = cash + accounts receivable= $175,000 + $180,000 = $355,000Total current liabilities = $210,000Quick ratio = Quick assetsCurrent liabilities = $355,000$210,000 = 1.69 Company N:Total quick assets = cash + accounts receivable= $89,000 + $155,000 = $244,000Total current liabilities = $190,000Quick ratio = Quick assetsCurrent liabilities = $244,000$190,000 = 1.28(4) Number of times inventory turned over during the year and the average number of days required to turn over inventory (round computation the nearestday)Company M:Cost of goods sold = $1,250,000 Average inventory = $72,000Inventory turnover rate = Cost of goods soldAverage (net) inventory = $1,250,000$72,000= 17.36 times per yearDays to sell inventory = 365Inventory turnover rate = 36517.36= 21 daysCompany N:Cost of goods sold = $1,120,000 Average inventory = $218,000Inventory turnover rate = Cost of goods soldAverage (net) inventory = $1,120,000$218,000= 5.14 times per yearDays to sell inventory = 365Inventory turnover rate = 3655.14= 71 days(5) Number of times accounts receivable turned over during the year and the average number of days required to collect account receivable (round computation the nearest day)Company M:Net credit sales = $1,600,000Average accounts receivable = $180,000Accounts receivable turnover rate = Net salesAverage (net) accounts receivable=$1,600,000$180,000=8.89 times per yearDays to collect accounts receivable = 365Accounts receivable turnover rate =3658.89= 41 daysCompany N:Net credit sales = $1,500,000Average accounts receivable = $155,000Accounts receivable turnover rate = Net salesAverage (net) accounts receivable=$1,500,000$155,000= 9.68 times per yearDays to collect accounts receivable = 365Accounts receivable turnover rate =3659.68= 38 days2. From the viewpoint of short-term creditor, comment on the quality of each company’s working capital. To which company would you prefer to sell $65,000 in merchandise on a 30-day open account?As Company M’s working capital ($217,000) is more than company N’s working capital ($272,000), from the viewpoint of short-term creditor, the quality of company N’s working capital is better than that of company M’s.I prefer to sell $65,000 in merchandise on a 30-day open account to company M,as company M spends less days (21 days) to sell inventory than company N (71 days).Problem 8-4The following data are selected from the financial statements of company G, a retail store:From the balance sheet:AssetsCash $46,000 Accounts receivable (net) 205,000 Inventory (at cost) 295,000 Plant & equipment (net of depreciation) 605,000 Current liabilities 210,000 Total owners’ equity600,000 Total assets 1,700,000 From the income statement:Net sales $3,000,000 Cost of goods sold 2,250,000 Operating expenses 525,000 Interest expense 85,000 Income tax expense 22,400 Net income 117,600 From the statement of cash flows:Net cash provided by operating activities $62,000 (including interest paid of $65,000) (68,000) Net cash used in investing activitiesFinancing activities:Amounts borrowed$52,000 Repayment of amounts borrowed (23,000) Dividends paid(21,000)Net cash provided by financing activities 8,000 Net increase in cash during the year$2,000Assume that the year-end balances shown for total assets and total owners’ equity also represent the average balances of these items throughout the year. This company issued no preferred shares. Required1. Explain how the interest expense shown in the income statement could be $85,000, when the interest payment appearing in the statement of cash flows is only $65,000.In the statement of cash flows, amounts are reported on a cash basis, whereas in the income statement, they are reported under the accrual basis. Apparently $20,000 of the interest expense incurred during the year had not been paid as of year-end. This amount should be included among the accrued expenses appearing as a current liability in the company’s balance sheet.2. Compute the following ratios/Dollar Amounts (round to one decimal place): (1) Current ratioTotal current assets = = cash + accounts receivable + inventory= $46,000 + $205,000 + $295,000 = $546,000Total current liabilities = $210,000Current ratio = Current assetsCurrent liabilities = $546,000$210,000 = 2.6(2) Working capitalTotal current assets = = cash + accounts receivable + inventory= $46,000 + $205,000 + $295,000= $546,000Total current liabilities = $210,000Working capital = Total current assets - Total current liabilities= $546,000 - $210,000= $336,000(3) Quick ratioTotal quick assets = = cash + accounts receivable= $46,000 + $205,000= $251,000Total current liabilities = $210,000Quick ratio = Quick assetsCurrent liabilities = $251,000$210,000= 1.2(4) Debt ratioTotal liabilities = total assets – total owners’ equity= $1,700,000 - $600,000= $1,100,000Total assets = $1,700,000Debt ratio = Total liabilitiesTotal assets = $1,100,000$1,700,000=64.7%(5) Times interest earnedIncome before income taxes and interest expense= net income + income taxes + interest expense= $117,600 + $22,400 + $85,000= $225,000Interest expense = $85,000Times interest earned = Income before income taxes and interestexpenseInterestexpense= $225,000$85,000= 2.6 times(6) Cash debt coverage ratioNet cash provided by operating activities = $62,000Average total liabilities = $1,100,000Cash debt coverage ratio = Net cashprovided by operating activitiesAverage total liabilities=$62,000$1,100,000= 0.06 times3. Comment on these measurements and evaluate Company G’s short-term debt-paying ability.By traditional measures, company G’s current ratio (2.6 to 1) and quick ratio (1.2 to 1) appear quite adequate. The company also generates a positive cash flow from operating activities ($62,000) which is about triple the amount of its dividend payments to stockholders ($21,000).4. Compute the following ratios:(1) Gross profit rateGross profit = Net sales - Cost of goods sold = $3,000,000 - $2,250,000 = $750,000 Net sales = $3,000,000Gross profit ratio = Gross profitNet sales = $750,000$3,000,000= 25%(2) Profit margin on sales Net income = $117,600 Net sales = $3,000,000Profit margin on sales = Net incomeNet sales = $117,600$3,000,000= 3.9%(3) Return on assetsNet income = $117,600 Average total assets = $1,700,000ROA = Net incomeAverage total assets = $117,600$1,700,000= =6.9%(4) Return on equityThis company issued no preferred shares. Net income = $117,600Average common owners’ equity = $600,000ROE = Net income-Preferreddividends Average common owners’ equity = $117,600$600,000= 19.6%(5) Payout ratioThis company issued no preferred shares. Net income = $117,600Cash dividends = $21,000Payout ratio = Cash dividendsNet income -Preferreddividends = $21,000$117,600= 17.9%5. Comment on Company G’s performance under these measurements.Company G’s profit margin on sales is 3.9%, indicating that one dollar of net sales results in net income of 3.9 cents. Investors and management can assess the company’s profitability by comparing its profit margin ratio with its competitors’ in the same industry. Profit margin on sales vary across industries. Retail stores generally experience lower profit margins.The 6.9% return on assets is not adequate by traditional standards to a retail store. However, the 19.6% return on equity is high. The problem arises because of company G’s relatively large interest expense, which is stated as $85,000 for the year.At year-end, company G has total liabilities of $1,100,000 ($1,700,000 total assets less $600,000 in owners’ equity). But $210,000 of these are current liabilities, most of which do not bear interest. Thus, company G has about $890,000 in interest-bearing debt.Interest expense of $85,000 on $890,000 of interest-bearing debt indicates an interest rate of approximately 9.55%. Obviously, it is not profitable to borrow moneyat 9.55%, and then reinvest these borrowed funds to earn a pretax return of only 6.9%. If company G cannot earn a return on assets that is higher than the cost of borrowing, it should not borrow money.Company G has a payout ratio of 17.9%, indicating that it has decided that it can and should pay 17.9% of its earnings to its owners. A higher percentage could mean that it has more cash than it has business opportunities to use that cash. A lower percentage could mean that it has very little cash to spare due to a declining business, or, very little cash to spare because it has many internal opportunities to invest that same cash.6. Discuss the safety of long-term creditors’ claims.Long-term creditors do not appear to have a high margin of safety. The debt ratio of 64.7% is high for American (or Chinese) industry. Also, debt is continuing to rise. During the current year, the company borrowed an additional $52,000, while repaying only $23,000 of existing liabilities. In the current year, interest payments alone ($65,000) was more than the net cash flow from operating activities ($62,000).A general rule of thumb is that a cash debt coverage ratio below 0.20 times is cause for additional examination. Company G’s cash debt coverage ratio is 0.06 times, below the 0.20 threshold, suggesting that the company is not solvent.。

金融专业英语(第二版)课件：Structured Finance

同等信用评级的公司债券和结构化金融产品分层面对的系统性风险是不同的，这些优先层级将在经济形势系统性变坏之时遭受更大的损失。因为单个公司债券所面对的风险包括其发行者自身的独有风险，而优先层的独有风险已经在构建资产池的过程中被分散化了，它所面对的风险几乎全部是系统性风险。
MBS的结构化拆分——“部分”or“分层”（即tranche）
MBS发行者从银行和金融公司购买了大量按揭贷款后，形成资产池，
并以资产池未来现金流来偿还投资者利息和本金。由于对同一MBS的投资
者中有人担忧按揭贷款被提前偿还，而另一部分希望尽可能早收回投资的
投资者却面临延长风险。因此发行人把MBS分为不同的“部分(tranche)”，
每个TRANCHE代表了对同一MBS 按揭池产生的现金流的不同级别的权利。
售给SPV，自留B类债权（因为这类债权不容易卖出好价钱），然后
SPV将这些贷款证券化出售给投资者。通过这种方式，可以将风险资
产转出资产负债表进而规避监管要求，如果是资信良好的大银行这样
做，甚至可以赚取利润。
CDO根据其标的资产的不同，可以分为CBO（以bond，市场流通
的债券为标的），和CLO（以loan,银行贷款为标的资产）两种类型。
性)
spectacular [spek'tæ kjələ(r) ] n. 奇观, 壮观; 豪华巨片; 展览物; 豪华电视片 adj. 壮观的; 引人注目的; 壮丽的; 惊人的例句：The goalkeeper made a spectacular dive to save the
goal. 守门员一个极为精彩的鱼跃扑住了那个射门。
例如，一个CMO(Collateralized Mortgage Obligations指将房地产抵押贷

商业银行管理-ROSE-7e-课后答案chapter-08

CHAPTER 8USING FINANCIAL FUTURES, OPTIONS, SW APS, AND OTHER HEDGING TOOLS INASSET-LIABILITY MANAGEMENTGoal of This Chapter: The purpose of this chapter is to examine how financial futures, option, and swap contracts, as well as selected other asset-liability management techniques can be employed to help reduce a bank’s potential exposure to loss as market conditions change. We will also discover how swap contracts and other hedging tools can generate additional revenues for banks by providing risk-hedging services to their customers.Key Topics in this Chapter•The Use of Derivatives•Financial Futures Contracts: Purpose and Mechanics•Short and Long Hedges•Interest-Rate Options:Types of Contracts and Mechanics•Interest-Rate Swaps•Regulations and Accounting Rules•Caps, Floor, and CollarsChapter OutlineI. Introduction: Several of the Most Widely Used Tools to Manage Risk ExposureII. Use of Derivative ContractsIII. Financial Futures Contracts: Promises of Future Security Trades at a Set PriceA. Background on FuturesB. Purposes of Financial Futures TradingC. Most Popular Types of Futures ContractsD. The Short Hedge in FuturesE. The Long Hedge in Futures1. Using Long and Short Hedges to Protect Income and Value2. Basis Risk3. Basis Risk with a Short Hedge4 Basis Risk with a Long Hedge5. Number of Futures Contracts NeededIV. Interest Rate OptionsA. Nature of Interest-Rate OptionsB. How They Differ from Futures ContractsC. Most Popular Types of OptionsD. Purpose of Interest-Rate OptionsV. Regulations and Accounting Rules for Bank Futures and Options TradingVI. Interest Rate SwapsA. Nature of swapsB. Quality swapsC. Advantages of Swaps Over Other Hedging MethodsD. Reverse swapsE. Potential Disadvantages of SwapsVII. Caps, Floors, and CollarsA. Interest Rate CapsB. Interest Rate FloorsC. Interest Rate CollarsVIII. S ummary of the ChapterConcept Checks8-1. What are financial futures contracts? Which financial institutions use futures and other derivatives for risk management?Financial futures contacts are contracts calling for the delivery of specific types of securities at a set price on a specific future date. Financial futures contract help to hedge interest rate risk and are thus, used by any bank or financial institution that is subject to interest rate risk.8-2. How can financial futures help financial service firms deal with interest-rate risk?Financial futures allow banks and other financial institutions to deal with interest-rate risk by reducing risk exposure from unexpected price changes. The financial futures markets are designed to shift the risk of interest rate fluctuations from risk-averse investors to speculators willing to accept and possibly profit from such risks.8-3. What is a long hedge in financial futures? A short hedge?A long hedger offsets risk by buying financial futures contracts around the time new deposits are expected, when a loan is to be made, or when securities are added to the bank's portfolio. Later, as deposits and loans approach maturity or securities are sold, a like amount of futures contracts is sold. A short hedger offsets risk by selling futures contracts when the bank is expecting a large cash inflow in the near future. Later, as deposits come flowing in, a like amount of futures contracts is purchased.8-4. What futures transactions would most likely be used in a period of rising interest rates? Falling interest rates?Rising interest rates generally call for a short hedge, while falling interest rates usually call for some form of long hedge.8-5. How do you interpret the quotes for financial futures in The Wall Street Journal?The first column gives you the opening price, the second and third the daily high and low price, respectively. The fourth column shows the settlement price followed by the change in the settlement price from the previous day. The next two columns show the historic high and low price and the last column points out the open interest in the contract.8-6. A futures is currently selling at an interest yield of 4 percent, while yields currently stand at 4.60 percent. What is the basis for these contracts?The basis for these contracts is currently 4.60% – 4% or 60 basis points.8-7. Suppose a bank wishes to sell $150 million in new deposits next month. Interest rates today on comparable deposits stand at 8 percent, but are expected to rise to 8.25 percent next month. Concerned about the possible rise in borrowing costs, management wishes to use a futures contract. What type of contract would you recommend? If the bank does not cover the interest rate risk involved, how much in lost potential profits could the bank experience?At an interest rate of 8 percent:$150 million x 0.08 x30360= $1 millionAt an interest rate of 8.25 percent:$150 million x 0.0825 x30360= $1.031 millionThe potential loss in profit without using futures is $0.0313 million or $31.3 thousand. In this case the bank should use a short hedge.8-8. What kind of futures hedge would be appropriate in each of the following situations?a. A financial firm fears that rising deposit interest rates will result in losses on fixed-rate loans?b. A financial firm holds a large block of floating-rate loans and market interest rates are falling?c. A pro jected rise in market rates of interest threatens the value of the financial firm’s bondportfolio?a. The rising deposit interest rates could be offset with a short hedge in futures contracts (for example, using Eurodollar deposit futures).b. Falling interest yields on floating-rate loans could be at least partially offset by a long hedge in Treasury bonds.c. The bank's bond portfolio could be protected through appropriate short hedges using Treasury bond and note futures contracts.8-9. Explain what is involved in a put option?A put option allows its holder to sell securities to the option writer at a specified price. The buyer of a put option expects market prices to decline in the future or market interest rates to increase. The writer of the contract expects market prices to stay the same or rise in the future.8-10. What is a call option?A call option permits the option holder to purchase specific securities at a guaranteed price from the writer of the option contract. The buyer of the call option expects market prices to rise in the future or expects interest rates to fall in the future. The writer of the contract expects market prices to stay the same or fall in the future.8-11. What is an option on a futures contract?An option on a futures contract does not differ from any other kind of option except that the underlying asset is not a security, but a futures contract.8-12. What information do T-bond and Eurodollar futures option quotes contain?The quotes contain information about the strike prices and the call and put prices at each different strike price for given months.8-13. Suppose market interest rates were expected to rise? What type of option would normally be used?If interest rates were expected to rise, a put option would normally be used. A put option allows the option holder to deliver securities to the option writer at a price which is now above market and make a profit.8-14. If market interest rates were expected to fall, what type of option would a financ ial institution’s manager be likely to employ?If interest rates were expected to fall, a call option would likely be employed. When interest rates fall, the market value of a security increases. The security can then be purchased at the option price and sold at a profit at the higher market price.8-15. What rules and regulations have recently been imposed on the use of futures, options, and other derivatives? What does the Financial Accounting Standards Board (FASB) require publicly traded firms to do in accounting for derivative transactions?Each bank has to implement a proper risk management system comprised of (1) policies and procedures to control financial risk taking, (2) risk measurement and reporting systems and (3) independent oversight and control processes. In addition, FASB introduced statement 133 which requires that all derivatives are recorded on the balance sheet as assets or liabilities at their fair value. Furthermore, the change in the fair value of a derivative and a fair value hedge must be reflected on the income statement.8-16. What is the purpose of an interest rate swap?The purpose of an interest rate swap is to change an institution's exposure to interest rate fluctuations and achieve lower borrowing costs.8-17. What are the principal advantages and disadvantages of rate swaps?The principal advantage of an interest-rate swap is the reduction of interest-rate risk of both parties to the swap by allowing each party to better balance asset and liability maturities and cash-flow patterns. Another advantage of swaps is that they usually reduce interest costs for one or both parties to the swap. The principal disadvantage of swaps is they may carry substantial brokerage fees, credit risk and some basis risk.8-18. How can a financial institution get itself out of a swap agreement?The usual way to offset an existing swap is to undertake another swap agreement with opposite characteristics.8-19. How can financial-service providers make use of interest rate caps, floors, and collars to generate revenue and help manage interest rate risk?Banks and other financial institutions can generate revenue by charging up-front fees for interest rate caps on loans and interest rate floors on securities. In addition, a positive net premium on interest rate collars will add to a bank's fee income. Caps, floors, and collars help manage interest rate risk by setting maximum and minimum interest rates on loans and securities. They allow the lender and borrower to share interest rate risk.8-20. Suppose a bank enters into an agreement to make a $10 million, three-year floating-rate loan to one of its corporate customers at an initial rate of 8 percent. The bank and the customer agree to a cap and a floor arrangement in which the customer reimburses the bank if the floating loan rate drops below 6 percent and the bank reimburses the customers if the loan rate rises above 10 percent. Suppose that, at the beginning of the loan's second year, the floating loan rate drops to 4 percent for a year and then, at the beginning of the third year, the loan rate increases to 11 percent for the year. What rebates must be paid by each party to the agreement?The rebate owed by the bank for the third year must be:(11%-10%) x $10 million = $100,000.The rebate that must be forwarded to the bank for the second year must be:(6%-4%) x $10 million = $200,000.Problems8-1. You hedged your bank’s exposure to declining interest rates by buying one March Treasury bond futures contract at the opening price on November 21, 2005(see exhibit 8-2). It is now January 9, and you discover that on Friday, January 6 March T-bond futures opened at 113-17 and settled at 113-16.a. What are the profits/losses on your long position as of settlement on January 6?Buy at 112-06 or 112 6/32 per contract = 112,187.50Value at settlement on January 6, 113-16 or 113 16/32 = 113,500.Gain = 113,500 – 112,187.50 = $1312.50b. If you deposited the required initial margin on 11/21 and have not touched the equityaccount since making that cash deposit, what is your equity account balance?The equity account balance will increase by the gain in the position,thus $1,150 + $1312.50 = $2,462.508-2 Use the quotes of Eurodollar futures contracts traded on the Chicago Mercantile Exchange on December 20, 2005 to answer the following questions:a. What is the annualized discount yield based on the low IMM index for the nearest Junecontract?The annualized discount yield is 100 – 95.13 = 4.87 percentb. If your bank took a short position at the high price for the day for 15 contracts, whatwould be the dollar gain or loss at settlement on December 20, 2005?Sell at high price: (1,000,000x[1-((4.87/100)x90/360)]x15 = 14,817,375Value at settlement: (1,000,000x[1-((4.86/100)x90/360)]x15 = 14,817,750Loss: 14,817,375 – 14,817,750 = -$375c. If you deposited the initial required hedging margin in your equity account upon takingthe position described in b, what would be the marked to market value of your equityaccount at settlement?Initial margin = $700x15 = $10,500You realize a $375 loss for this transaction.Thus your equity position is: $10,500 - $375 = $10,1258-3. What kind of futures or options hedges would be called for in the following situations?a. Market in terest rates are expected to increase and First National Bank’s asset andliability managers expect to liquidate a portion of their bond portfolio to meetdepositor’s demands for funds in the upcoming quarter.First National can expect a lower price when they sell their bond portfolio unless it uses short futures hedges in which contracts for government securities are first sold and then purchased at a profit as security prices fall provided interest rate really do rise as expected. A similar gain could be made using put options on government securities or on financial futures contracts.b. Silsbee Savings Bank has interest-sensitive assets of $79 million and interest-sensitive liabilities of $88 million over the next 30 days and market interest rates are expected to rise.Silsbee Savings Bank’s interest-sensitive liabilities exceed its interest-sensitive assets by $11 million which means the bank will be open to losses if interest rates rise. The bank could sell financial futures contracts or use a put option on government securities or financial futures contracts approximately equal in dollar volume to the $11 million interest-sensitive gap to hedge their risk.c. A survey of Tuskee Bank’s corporate loan customers this month (January) indicates that, on balance, this group of firms will need to draw $165 million from their credit lines in February and March, which is $65 million more than the bank’s management has forecasted and prepared for. The bank’s economist has predicted a significant increase in money market interest rates over the next 60 days.The forecast of higher interest rates means the bank must borrow at a higher interest cost which, other things held equal, will lower its net interest margin. To offset the expected higher borrowing costs the bank's management should consider a short sale of financial futures contracts or a put option approximately equal in volume to the additional loan demand. Either government securities or EuroCDs would be good instruments to consider using in the futures market or in the option market.d. Monarch National Bank has interest-sensitive assets greater than interest sensitive liabilities by $24 million. If interest rates fall (as suggested by data from the Federal Reserve Board) the bank’s net interest margin may be squeezed due to the decrease in loan and security revenue.Monarch National Bank has interest-sensitive assets greater than interest-sensitive liabilities by $24 million. If interest rates fall, the bank's net interest margin will likely be squeezed due to the faster fall in interest income. Purchases of financial futures contracts followed by a subsequent sale or call options would probably help here.e. Caufield Thrift Association finds that its assets have an average duration of 1.5 years and its liabilities have an average duration of 1.1 years. The ratio of liabilities to assets is .90. Interest rates are expected to increase by 50 basis points during the next six months.Caufield Bank and Trust Company has asset duration of 1.5 years and a liabilities duration of 1.1. A 50-basis point rise in money-market rates would reduce asset values relative to liabilities which mean its net worth would decline. The bank should consider short sales of government futures contracts or put options on these securities or on their related futures contracts.8-4. Your bank needs to borrow $300 million by selling time deposits with 180-day maturities. If interest rates on comparable deposits are currently at 4 percent, what is the cost of issuing these deposits? Suppose deposit interest rates rise to 5 percent. What then will be the marginal cost of these deposits? What position and types of futures contract could be used to deal with this cost increase?At a rate of 4 percent the interest cost is:$300 million x 0.04 x 180360= $6,000,000At a rate of 5 percent the interest cost would be:$300 million x 0.05 x 180360= $7,500,000A short hedge could be used based upon Eurodollar time deposits.8-5. In response to the above scenario, management sells 300, 90-day Eurodollar time deposits futures contracts trading at an IMM Index of 98. Interest rates rise as anticipated and your bank offsets its position by buying 300 contracts at an IMM index of 96.98. What type of hedge is this? What before-tax profit or loss is realized from the futures position?Bank sells Eurodollar futures at (1,000,000*[1-((2/100)*90/360)] $995,000 (per contract)Bank buys Eurodollar futures at (1,000,000*[(1-(3.02/100)*90/360]$992,450 (per contract)Expected Before-tax Profit $ 2,550 (per contract)And Total Profit would be 300*$2550 = $765,000In this case the bank has employed a short hedge which partially offsets the higher borrowing costs outlined above.8-6. It is March and Cavalier Financial Services Corporation is concerned about what an increase in interest rates will do to the value of its bond portfolio. The portfolio currently has a market value of $101.1 million and Cavalier’s management intends to liquidate $1.1 million in bonds in June to fund additional corporate loans. If interest rates increase to 6 percent, the bond will sell for $1 million with a loss of $100,000. Cavalier’s management sells 10 June Treasury bond contracts at 109-05 in March. Interest rates do increase, and in June Cavalier’s ma nagement offsets its position by buying 10 June Treasury bond contracts at 100-03.a.What is the dollar gain/loss to Cavalier from the combined cash and futures market operations described above?Loss on cash transaction: $100,000Gain on futures transaction: 109,156.25 – 100,093.75 = 9062.5 (per contract)Loss: 9062.50(10) – 100,000 = -$9,375b. What is the basis at the initiation of the hedge?110,000 – 109,156.25 = 843.75c. What is the basis at the termination of the hedge?100,000 – 100,093.75 = -93.75d. Illustrate how the dollar return is related to the change in the basis from initiation fromtermination?Dollar return = -93.75 – 843.75 = -937.50 per contract or –937.50(10) = -$93758-7. By what amount will the market value of a Treasury bond futures contract change if interest rates rise from 5 to 6 percent? The underlying Treasury bond has a duration of 10.48 years and the Treasury bond futures contract is currently quoted at 113-06 (Remember that Treasury bonds are quoted in 32nds)Change in value = -10.48 x $113,187.50 x .01/(1+.05) = -$11,297.198-8. Trojan National Bank reports that its assets have a duration of 8 years and its liabilities average 3 years in duration. To hedge this duration gap, management plans to employ Treasury bond futures, which are currently quoted at 112-17 and have a duration of 10.36 years. Trojan’s latest financial report shows total assets of $120 million and liabilities of $97 million. Approximately how many futures contracts will the bank need to cover its overall exposure?Number of Futures Contracts Needed = 25.531,112*36.10000,000,120*]3*120978[= 5748-9 You hedged your bank’s exposure to declining interest rates by buying one March call on Treasury bond futures at the premium quoted on December 13th , 2005 (see exhibit 8-4).a. How much did you pay for the call in dollars if you chose the strike price of 110?(Remember that option premiums are quoted in 64ths.)Price per call = 2.625 x 100,000 = $262,500b. Using the following information for trades on December 21, 2005, if yousold the call on 12/21/05 due to a change in circumstances would you havereaped a profit or loss? Determine the amount of the profit/loss.Sell call at: 3.125 x 100,000 = 312,500Gain = 312,500 – 262,500 = $50008-10 Refer to the information given for problem 9. You hedged your bank’s exposure to increasing interest rates by buying one March put on Treasury bond futures at the premium quoted on December 13th, 2005 (see exhibit 8-4).a. How much did you pay for the put in dollars if you chose the strike price of 110?(Remember that premiums are quoted in 64ths.)Price per put = .765625 x 100,000 = $76,562.25b. Using the above information for trades on December 21, 2005, if you soldthe put on 12/21/05 due to a change in circumstances would you have reapeda profit or loss? Determine the amount of the profit/loss.Sell put at: .421875 x 100,000 = $42,187.50Loss = $42,187.50 – 76,562.25 = -$34,374.758-11. You hedged your thrift institution’s exposure to dec lining interest rates by buying one March call on Eurodollar deposits futures at the premium quoted on December 13th, 2005 (see exhibit 8-4).a. How much did you pay for the call in dollars if you chose the strike price of 9525?(remember that premiums are quoted in IMM index terms)Value of the call: 6.25 x $25 = $156.25b. If March arrives and Eurodollar Deposit Futures have a settlement index at expirationof 96.00, what is your profit or loss? (Remember to include the premium paid for thecall option).Payout from settlement: (9600-9525) 75 basis points x $25 = $1,875Net gain: $1,875 –$156.25 = $1,718.758-12. You hedged your bank’s exposure to increasing interest rates by buying one March put on Eurodollar deposit futures at the premium quoted on December 13th, 2005 (see exhibit 8-4).a. How much did you pay for the put in dollars if you chose the strike price of 9,550?(remember that premiums are quoted in IMM index terms)Value of the put: 29.25 x $25 = $731.25b. If March arrives and Eurodollar Deposit Futures have a settlement index at expirationof 96.00, what is your profit or loss? (Remember to include the premium paid for theput option).Payout from settlement: $0 (option is out of the money)Net loss: $0 - $731.25 = -$731.258-13. A bank is considering the use of options to deal with a serious funding cost problem. Deposit interest rates have been rising for six months, currently averaging 5 percent, and are expected to climb as high as 6.75% over the next 90 days. The bank plans to issue $60 million in new money market deposits in about 90 days. It can buy put or call options on 90 day Eurodollar time deposit futures contracts for a quoted premium of .31 or $775 for each million-dollar contract. The strike price is quoted as 9,500. We expect the futures to trade at an index of 93.50 within 90 days. What kind of option should the bank buy? What before tax profit could the bank earn for each option under the terms described?You are trying to protect the bank against rising interest rates, thus you want to buy a put option.Profit on put: payout from settlement = (9500-9350) 150 basis points x $25 = $3,750 Net profit: $3,750 - $775 = $2,975If the bank bought the call option, the value at settlement would be $0 and the bank would loose the call premium of $775.8-14. Hokie Savings Bank wants to purchase a portfolio of home mortgage loans with an expected average return of 8.5 percent. The bank’s management is concerned that interest rates will drop and the cost of the portfolio will increase from the current price of $50 million. In six months when the funds become available to purchase the loan portfolio, market interest rates are expected to be in the 7.5 percent range. Treasury bond options are available today at a quoted price of $79,000 (per $100,000 contract), upon payment of a $700 premium, and are forecast to rise to a market value of $87,000 per contract. What before-tax profits could the bank earn per contract on this transaction? How many options should Hokie buy?Profit per contract: $87,000 - $79,000 -$700 = $7,300Hokie should buy enough options to offset the increase in the price of the loan portfolio. Thus, figure out the price increase and divide that number by 7,300 to get the number of options needed.8-15. A savings and loan’s credit rating has just slipped, and half of its assets are long term mortgages. It offers to swap interest payments with a money-center bank in a $100 million deal. The bank can borrow short term at LIBOR (8.05 percent) and long term at 8.95 percent. The S&L must pay LIBOR plus 1.5 percent on short term debt and 10.75 percent on long term debt. Show how these parties could put together a swap deal that benefits both of them about equally.This SW AP agreement would have the form:Fixed Rate the Floating Rate PotentialBorrower Pays the Borrower Interest-Rateif They Issue Pays on Short- SavingsLong-Term Bonds Term Loans of Each BorrowerS&L 10.75% LIBOR + 1.50% 1.20%Money- 8.95% LIBOR (8.05%) 0.90%Center BankDifference 1.80% 1.50% 0.30%in Rates Due toDifferences inCredit RatingsIf the money-center bank borrows long-term at 8.95 percent and the S&L at LIBOR + 1.50 percent (which is currently 8.05 + 1.50 or 9.55 percent) and they exchange interest payments, both would save if the S&L agreed to pay a portion of the bank’s basic borrowing rate. For example, the S&L could pay 160 basis points to the bank which would more than cover the difference. After the exchange in payments an d basis points the S&L would pay 8.95% +1.6% or 10.55% which is lower than the S&L’s long term rate and the bank would pay 9.55%-1.6% or 7.95% which is less than the bank’s short term rate and each party would get the type of payment they want.8-16. A bank plans to borrow $55 million in the money market at a current interest rate of 4.5 percent. However, the borrowing rate will float with market conditions. To protect itself the bank has purchased an interest-rate cap of 5 percent to cover this borrowing. If money market interest rates on these funds suddenly climb to 5.5 percent as the borrowing begins, how much in total interest will the bank owe and how much of an interest rebate will it receive assuming the borrowing is only for one month?Total Amount Interest Number of Months Interest Owed = Borrowed * Rate Charged * 12= $55 million x 0..055 x1 12= $0.527 million or $252,083.33.How much of an interest rebate will the bank receive for its one-month borrowing?[]12MonthsofNumberxBorrowedAmt.xRateCap-RateInterestMarketRebateInterest == (.055 - .05) x $55 million x1 12= $22,916.67.8-17. Suppose that Jasper Savings Association has recently granted a loan of $2.4 million to Fairhills Farms at prime plus .5 percent for six months. In return for granting Fairhills an interest cap of 8% on its loan, this thrift has received from this customer a floor rate on the loan of 6 percent. Suppose that, as the loan is about to start the prime rate declines to 5.25 percent and remains there for the duration of the loan. How much (in dollars) will Fairhill Farms have to pay in total interest on this six month loan? How much in interest rebates will Fairhills have to pay due to the fall in the prime rate?Total = Amount * Interest * Number of Months Interest Owed Borrowed Rate Charged 12= $2.4 million x (.0525 + .0050) x6 12= $0.069 million or $69,000.Fairhills will have to pay an interest rebate to Exeter National Bank of:[]12MonthsofNumberxBorrowedAmt.xRateInterestCurrent-RebateFloorRebateInterest == (.060 - .0575) x $2.4 million x6 12= $0.003 million or $3,000.。

财务分析-财务分析与证券定价(英文)chapter8 精品

(FASB No. 115)
Operating or Financing Income Items:
• Foreign currency translation gains and losses • Unrealized gains and losses on derivative instruments
(FASB No. 109)
• Unrealized gains and losses on equity securities available for sale (FASB No. 115)
Financing Income or Expenses:
• Preferred Dividends • Unrealized gains and losses on debt securities available for sale • Losses on redemption of preferred stock
1chase of treasury shares
(3,223)
($144,175)
Common Stock held in trust for
deferred compensation plans
(233)
(6,728)
Exercise of stock options, net of
(FASB No. 52)
• Minimum pension liability adjustment
(FASB No. 87)
• Tax benefits of loss carry forwards acquired
(FASB No. 109)
• Tax benefits of preferred dividends paid to ESOPS

货币金融学-第八章

Chapter 8
An Economic Analysis of Financial Structure
© 2005 Pearson Education Canada Inc.
Sources of External Finance in Canada
© 2005 Pearson Education Canada Inc.
Canada Inc.
8-7
Tools to Help Solve Adverse Selection (Lemons) Problem
1. Private Production and Sale of Information Free-rider problem interferes with this solution
Moral hazard: borrower wants to take on too much risk
Tools to Help Solve Moral Hazard 1. Net worth 2. Monitoring and enforcement of restrictive 3. Financial intermediation
Stock market effects on net worth Unanticipated deflation Cash flow effects 4. Bank panics 5. Government fiscal imbalances
© 2005 Pearson Education Canada Inc.
Adverse Selection: 1. Before transaction occurs 2. Potential borrowers most likely to produce adverse outcomes are

金融英语第八章答案

金融英语第八章答案.Chapter 8Financial StatementsExercisesI. Answer the following questions in English.1. In what section of the balance sheet would one f ind patents and trademarks?答案：In Assets and Owners’ equity of the balance s heet would one find patents and trademarks.2. Which depreciation method bases depreciation exp ense for a given period on actual use?答案：The usefulness of a machine lessens with use over the years, and therefore becomes a loss from t he initial value of the machine upon its purchase.3. Which financial statement is prepared as of a pa rticular date rather than for a Period ending on a particular date?答案：A balance sheet represents a specific period of time.4. Who has the primary responsibility for the finan cial statements?答案：Shareholders and lenders supply capital (cash) to the company. The capital suppliers have clams on the company.5. At what value is land used in a business shown o n the balance sheet?答案：At Gross Profit is land used in a business sh own on the balance sheet.6. Which of the following results from using the LI FO method of inventory cost flows during a period o f inflation?答案：Inventory for businesses that sell retail will consist ofthe public.7. What reflects the net tax effects of the tempora ry differences between the carrying values of asset s and liabilities for financial reporting purposes a nd amounts used for income tax purposes?答案：Assets are what a company uses for its product ion process, while liabilitiesare obligations to be paid to outside parties.8. What is the cost of a fixed asset less its accu mulated depreciation?答案： Long-term assets, also known as fixed assets, have a life span of over one year.They can refer t o tangible assets such as machinery, computers, bu ildings andland. Depreciation is calculated and de ducted from these types of assets.9.How are held-to-maturity securities reported on the balance sheet?答案： When we look at the balance sheet we need to know how to assess the numbers.Financial ratios ca n be calculated from the balance sheet, and these h elp theinvestor understand the state of liquidity a nd growth potential of the company in question. 10. How many types of inventories does a manufactur ing firm list on its balance sheet?答案： If the firm is manufacturing a product, the i nventory is divided into three different stages: r aw materials, work-in-progress (WlP) and finished goods.11. What does the FIFO inventory method assume abou t the first units purchased?答案： Inventory for businesses that sell retail wil l consist ofthe public.12. What does a company record when it receives a c ash payment for setvices before it performs the ser vices?答案：Cash, the most fundamental of current assets, also includes non-restricted bank accounts and chec ks.Cash equivalents are stocks and other money mar ketinstruments such as U.S. Treasuries that can be quickly changed into money. II. Fill in the each blank with an appropriate word or expression.1. Basic earnings per share are computed by dividing net income by _quarter_.2. Financial statements must be prepared in accorda nce with business .3. The annual depreciation expense using the double -declining-balance method is equal to liabilities .4. Financial instruments that derive their value fr om an underlying asset or index are called assets .5. Accounts receivable are reported on the balance sheet at their assets .6. The book value of property, plant, and equipment is the copyright .7. The reporting of inventory values at the lower of cost or market reflects the accounting principle or convention of production ,8. Financial instruments that derive their value fr om an underlying asset or index are called assets .111. Translate the following sentences into Englis h.1.公司财务报表既反映了公司的财务状况，同时也是公司经营状况的综合反映。

会计英语九章

Debt financing

One of the primary sources to increase owners’ equity is the investments of cash or other assets from the owners to the business.-----cash assets and noncash assets Cash Patent Equipment
Selling Administrative
Manufacturing Costs

Raw materials inventory – cost of items of raw material being held for production + freight costs Work-in-process inventory – cost of products being processed Finished goods inventory – manufacturing cost of products that have been completed and are waiting shipment to customers
Cost of Goods Manufactured
Direct materials used
Finished Goods Inventory Work-inProcess inventory
Cost of goods sold
Direct labor
Manufacture overhead

Direct materials are those raw material used in manufacture which can be allocated directly to the products Direct labor is the wages paid to the manufacture workers which can be allocated directly to the products. Manufacture overhead are all the other production expenditures that could not be allocated to the products directly

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2）Expertise（专门技术）
Problem 1(课后题2）: Describe two ways in which financial intermediaries help lower transaction costs in the economy.
Ⅲ Asymmetric Information
由经济学家乔治· 阿克洛夫（George Akerlof）于1970年提出来。 “柠檬”一词在美国俚语中表示“次品”，由于逆向选择对市场的影响类似于二手车市场的次品问题，故柠檬问题又称次品车问题。“柠檬问题”是信息不对称理论的重要组成部分。
二手车市场（used-car market）
买者不知道每辆车的质量但知道车市的质量分布。假设车市有三辆车，价格分别为：0,5,10。首先，顾客愿意花费的价格是5，所以，价格为10的车主退出市场；之后，基于市场质量分布，顾客将只愿意花费2.5，价格为5的车主退出市场；最后，顾客的花费意愿将降为0，且只有最差的车留在市场。
交易一方对另一方缺乏充分了解，以至于无法做出正确的决策。
1）Adverse selection
2）Moral hazard
Ⅲ Asymmetric Information
and Financial Structure
1、How Adverse Selection Influences Financial Structure------ The Lemons Problem（柠檬问题）
Ⅰ Basic Puzzles About Financial Structure Throughout the World
5、The financial system is among the most heavily regulated sectors of the economy. 6、Only large, well-established（组织完善） corporations have easy access to securities markets to finance their activities. Individuals and medium-small businesses
债券股票
中国非金融企业外部资金来源 (1992-2008) 数据来源：根据《中国金融年鉴》中历年中国资金流量表计算。
Ⅰ Basic Puzzles About Financial Structure Throughout the World
1、Stocks are not the most important source of external financing for businesses. 2、Issuing marketable debt and equity securities is not the primary way in which businesses finance their operations. 3、Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financial markets. 4、Banks are the most important source of external funds used to finance businesses.
Ⅰ Basic Puzzles About Financial Structure Throughout the World
80.0 70.0 60.0 50.0
贷款
40.0 30.0 20.0 10.0 0.0 1992 (10.0) 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
(3)Explanations for puzzle 1 and 2.
Ⅲ Asymmetric Information and Financial Structure
2、Tools to Help Solve Adverse Selection Problems（解决办法）（1）Private Production and Sale of Information
1、Transaction Cost: The time and money spent in carrying out transactions. (达成交易所耗费的时间和金钱）金融市场的交易成本包括直接交易成本和隐含的交易成本，前者包括佣金、信息成本和税收，后者包括执行成本和机会成本。
2、How transaction costs influence financial structure
Ⅲ Asymmetric Information and Financial Structure
Asymmetric information;
Investors are willing to pay only a price that reflects the average quality of firms issuing securities—a price that lies between the value of securities from bad firms and the value of those from good firms.
Transaction costs keep many people from investing financial market. 3、How Financial Intermediaries Reduce Transaction Costs
Financial Intermediaries
1）Economies of Scale (规模经济） Eg. mutual fund
7、Collateral （抵押）is a prevalent feature（显著特征） of debt contracts for both households and businesses.
unsecured debt（无担保债务）； secured debt（担保债务）
Collateral is property that is pledged to the lender to guarantee payment in the event that the borrower is unable to make debt payments.
Financial Structure (金融结构）：
金融结构是指构成金融总体的各个组成部分的存在、分布、相对规模、相互关系与配合的状态。一国的金融总ห้องสมุดไป่ตู้主要由金融组织、金融市场、各种融资活动、各种金融资产等构成。
Financial Structure (金融结构）：
1、金融体系结构
各种金融机构（包括中央银行、商业银行、保险公司、信托投资公司、证券公司、信用合作社等）的设置比例和金融机构内部的组织状况。 2、金融市场结构包括货币市场、资本市场、证券市场、外汇市场、黄金市场等子市场的市场规模及在金融市场中所占的比重。 3、金融工具结构
8、Debt contracts typically are extremely complicated （极为复杂）legal documents that place substantial restrictions（无数限制） on the behavior of the borrower.
ⅡTransaction Cost and Financial Structure
Ⅲ Asymmetric Information
and Financial Structure
（1）基本观点：
①在次品市场上，交易双方对质量信息的获得是不对称的，卖者知道产品确切的真实质量，而买者却不知道产品的确切质量。 ②交易活动的参与人（这里指卖方）可以利用这种信息的不对称性对买方进行欺骗，这就是“隐藏信息”和“隐藏行动”。 ③隐藏信息将导致“逆向选择”，其含义有二：一是在交易中隐藏信息的一方对交易另一方利益产生损害；二是市场的优胜劣汰机制发生扭曲，质量好的产品被挤出市场，而质量差的产品却留在市场，极端的情况是市场会逐步萎缩直到消失。这是因为买者只愿意根据他所知道的平均质量来决定支付的价格，这个价格将使质量低的卖者愿意成交，质量高的卖者由于不能得到同质量相称的价格而退出市场。
How to explain these features Transaction cost Asymmetric information
Ⅰ Basic Puzzles About Financial Structure Throughout the World
Sources of External Funds for Nonfinancial Businesses (1970-2000)
在金融市场上各种金融工具，如现金、商业票据、股票、债券等所使用的范围和在金融交易量中所占的比重。
4、金融商品价格结构
金融商品价格的构成状况，它反映了各种金融工具的质量、收益和期限的组合。
5、融资结构直接融资和间接融资的规模及所占的比重。
Preview:
The features of financial structure
（2）Lemons in the Stock and Bond Markets（股票与债券市场次品车问题）
Good firms know that their securities are undervalued and will not want to sell them to investors at the price they are willing to pay. The only firms willing to sell investors securities will be bad firms (because the price is higher than the securities are worth). Investors do not want to hold securities in bad firms, and hence they will decide not to purchase securities in the market.