金融英语期末重点题

名词解释
1、Financial market（金融市场）is a market in which financial assets (securities) such as stocks and bonds can be purchased or sold.
2、Those participants that provide funds are called surplus units（盈余方）.
3、Participants that enter financial markets to obtain funds are called deficit units（赤字方）
4、Those financial markets that facilitate the flow of short-term funds (with maturities of less than one year) are known as money markets（货币市场）.
5、Those that facilitate the flow of long-term funds are known as capital markets（资本市场）.
6、Primary markets（一级市场）facilitate the issuance of new securities. The issuance of new corporate stock or new treasury securities is a primary market transaction.
7、Secondary markets（二级市场）facilitate the trading of existing securities. The sale of existing corporate stock or treasury security holdings by any business or individual is a secondary market transaction.
8、liquidity（流动性）, which is the degree to which securities can easily be liquidated (sold) without a loss of value.
9、over-the-counter (OTC) market（场外市场）, which is a telecommunications network.
10、A secondary stock offering（二次发行）is a new stock offering by a specific firm whose stock is already publicly traded.
11、Money Market Securities（货币市场证券）are debt securities that have a maturity of one year or less.
12、Capital Market Securities（资本市场证券）securities with a maturity of more than one year are called Capital Market Securities.
13、Bonds（债券）are long-term debt obligations issued by corporations and government agencies to support their operations. (Treasury notes and bonds).
14、Mortgages（抵押贷款）are long-term debt obligations created to finance the purchase of real estate
15、Stocks（股票）(also referred to as equity securities 股权类证券) are certificates representing partial ownership in the corporations that issued them. They are classified as capital market securities.
16、Derivative securities（衍生证券）are financial contracts whose values are derived from the values of underlying assets (such as debt securities or equity securities).
17、Speculation（投机）: derivative securities allow an investor to speculate on movements in the underlying assets without having to purchase those assets.
18 、Hedging（套期保值）: Derivative securities can be used in a manner to generate gains if the value of the underlying assets declines.
19、Foreign exchange rates（外汇汇率）: is the price of one money in terms of another one.
20、Mutual Funds（共同基金）: they sell shares to surplus units and use the funds received to purchase a portfolio of securities.
21、The Loanable Funds theory（可贷资金理论）, commonly used to explain interest rate movements, suggests that the market interest rate is determined by the factors that control the supply of and demand for loanable funds.
22、This relationship between interest rate and expected inflation is often referred to as the Fisher Effect（费舍效应）.
23、Crowding-out effect.（挤出效应）Given a certain amount of loanable funds supplied to the market( through saving), excessive government demand for these funds tends to “crowd out” the private demand (by consumer and corporation) for funds.
24、Repurchase Agreements（购回协议）The Trading Desk purchases Treasury securities from government securities dealers with an agreement to sell back the securities at a specified date in the near future—to ensure adequate liquidity
25、The Federal Reserve System (the Fed)(联邦储备系统), as the central bank of the United States, has the responsibility for conducting national monetary policy. 26、Commercial paper（商业票据）is a short-term debt instrument issued only by well-known creditworthy firms and is typically unsecured.
27、Negotiable Certificates of Deposit (NCDs)（可转让存单）are issued by large commercial banks and other depository institutions as a short-term source of funds.
28、Repo（回购）refers that one party sells securities to another with an agreement to repurchase the securities at a specified date and price.
29、Federal funds（联邦基金）market allows depository institutions to effectively lend or borrow short-term funds from each other at the so-called federal funds rate.
30、A banker’s acceptances（银行承兑）indicates that
a bank accepts responsibility for a future payment. They are commonly used for international trade transactions.
31、The U.S. dollar deposits in non-U.S. banks is called Eurodollar certificates of deposit or Eurodollar CDs（欧洲美元存款）.
32、Bond markets(债券市场)facilitate the flow of long-term debt from surplus units to deficit units.
33、Bearer bonds（无记名债券）: require the owner to clip coupons attacked to the bonds and send them to the issuer to receive coupon payments.
34、Registered bonds（记名债券）: require the issuer to maintain records of who owns the bond and automatically send coupon payments to the owners. 35、An initial public offering（首次公开募股）is a first-time of shares by a specific firm to the public.
36、Over-the-Counter Market（场外交易市场）:Trades through a telecommunications network
37、Financial futures markets（金融期货市场）facilitate the trading of financial future contracts.
38、financial futures contract（期货合约）is a standardized agreement to deliver or receive a specified amount of a specified financial instrument at a specified price and date.
39、price movements of bond futures contracts Economic growth: employment, GDP, retail sales, industrial production, and consumer confidence
40、A bond index futures contract allows for the buying and selling of a bond index for a specified price at a specifies date.
41、Open Market Operations
The buying and selling of government securities (through the Trading Desk) is referred to as open market operations.
42、Stripped treasury bonds
Stripped Treasury Bonds
The cash flows of bonds are commonly transformed(转化) by securities firms so that one security represents the principal payment only while a second security represents the interest payments
1.depository institution（存款类金融机构）：
1Commercial Banks.2Saving institutions include savings and loan associations (S&Ls) and saving banks.
3 Interaction between Savings Institutions and Other Financial Institutions. 4Credit unions(信用合作组织)
2.Nondepository Financial Institutions（非存款类金融机构）
1Finance Companies2Mutual Funds (共同基金)3 Securities firms4Insurance Companies 5 Pension Funds
3.Depository institutions are popular financial institutions for the following reasons:
They offer deposit accounts that can accommodate the amount and liquidity characteristics desired by most surplus units.
Repackage funds received from deposits to provide loans of the size and maturity desired by deficit units. They act as a creditor.
Accept the risk on loans provided.
Have more expertise than individual surplus units in evaluating the creditworthiness of deficit units
Diversify their loans among numerous deficit units and therefore can absorb defaulted loans better than individual surplus units could.
4.Demand for loanable funds
1）Household demand 2）Business demand 3)Government demand 4)Foreign demand 5)Aggregate demand
5.The Fed has five major components:
Federal Reserve district banks(联储地区银行)Member banksBoard of Governors(联邦储备理事会)Federal Open Market Committee (FOMC)Advisory committees(顾问委员会)
6.The Fed can use three monetary policy tools to either increase or decrease the money supply:
1）Open market operations
2）Adjustments in the discount rate 3）Adjustments in the reserve requirement ratio
parison of Monetary Policy Tools
1）Open market operations are convenient and used without signaling the Fed’s intent ions.
2）Adjustment to loans by adjusting discount rate is only temporary.
3）Adjustment in the reserve requirement ratio can cause erratic (反复无常的)shifts in the money supply.
6 M1 = Currency + checking deposits
M2 = M1 + saving deposits, MMDAs, Eurodollars, small time deposits
M3 = M2 + money market mutual funds, large time deposits, repurchase agreements
8.popular money market securities are:
Treasury bills, commercial paper, negotiable certificates of deposit, repurchase agreements, federal funds and banke r’s acceptances
9.The reasons that the Eurodollar market are attractive for both depositors and borrowers:
the spread between the rate banks pay and the rate they charge is relatively small
Only governments and large corporations participate in this market—lower risk
Investors in the market avoid some costs (no deposit insurance, lower taxes, no government-mandated credit allocations)
Eurodollar CDs are not subject to reserve requirements Less regulations and restrictions
10.The purpose for call provisions（提前赎回条款）: End up paying a higher rate when interest rates decline Retire bonds as required by a sinking-fund provision 11.Futures and forward contracts are similar in the following ways:
Both are derivative securities for future delivery. The parties agree today on price and quantity for settlement in the future.
Both are used to hedge currency risk, interest rate risk or commodity price risk.
They differ in these ways:
Forward contracts are private, customized定制contracts between a bank and its clients depending on the client’s needs (OTC). There is no secondary market for forward contracts since they are private contractual agreements.
Forward contracts are settled at expiration. Futures contracts are continually settled (mark to market) Profits/losses for a futures contract accumulate on a daily basis unlike a forward contract where profits/losses are realized at once at contract expiration. Futures markets have daily price limits. If the settlement price changes by the daily price limit, trading is stopped until the next day.
12.Risk of Trading Futures Contracts
1）Market risk: refers to fluctuations in the value of the instrument as a result of market conditions. (wrong expectation)
2）Basis risk: the position being hedged by the futures contracts is not affected in the same manner as the instrument underlying the futures contract.
3）Liquidity risk: refers to potential price distortions due
to a lack of liquidity. (no traders)
4）Credit risk: is the risk that a loss will occur because a counterparty defaults on the contract.
5）Prepayment risk: refers to the possibility that the assets to be hedged may be prepaid earlier than their designated maturity.
6）Operational risk: is the risk of losses as a result of inadequate management or controls.
13 Foreign stock offerings in U.S.
Advantages: enhance the global image, easily place the issue of new stock, obtain large amount of fund, diversifies the shareholder base, increase the liquidity, protect a firm against hostile takeovers(恶意收购) Disadvantages: stringent(严格的) regulations, entail some costs
14、How does the Fed use the monetary policy tools to adjust the money supply?
（1）When the Fed issues securities, the commercial banks purchase those that are most attractive. The total funds decrease and the money supply falls.
When the Fed purchase securities, the total funds increase, which represents a loosening of money supply growth.
（2）To increase the money supply, the Fed can authorized a reduction in the discount rate; to decrease the money supply, the Fed can increase the discount rate.
（3）The lower the reserve requirement ratio, the greater the lending capacity of depository institutions, so a larger money supply.
Money multiply
15、What are the characteristics of corporate bonds?
（1）The bond indenture, trustee
（2）Sinking-Fund Provision(偿债基金准备)
（3）Protective Covenants(保护条款)
16、What is the relationship between the government demand for loanable funds and interest rate? (Explain by pictures)
The federal government demand-for-loanable-funds schedule is Dg1, if new bills are passed that cause a net increase in the deficit of USD20 billion, the federal government demand for loanable funds will increaseby that amount. The new demand schedule is Dg2.
17、What are the ways by which the money flows from individual surplus units to deficit units?
a major type of financial intermediary is the depository institution which accepts deposits from surplus units and provides credit to deficit units through loans and purchases of securities.
18、How does the level of tax, do you think, affect the demand of household for loanable funds (please explain by pictures)?
An investment tax credit will increase the incentive to borrow，it increases the demand for loanable funds.。