上外贤达-10级跨国公司金融 思考题 2013(修改)

思考题2013 (金融)

Part 1 - Explain the following terms:

1.Direct quote (one of the foreign exchange quotes) 直接标价

A direct quote is a home currency 本币price of a unit 单位of foreign currency 外币.

2.Indirect quote (one of the foreign exchange quotes) 间接标价

An indirect quote is a foreign currency price of a unit of home currency.

w of one price一价定律

If identical products or services can be sold in two different markets, and no restrictions exist on the sale or transportation costs 销售或运输成本of moving the prod uct between markets, the product’s price should be the same in both markets.

4.Foreign Currency Options外汇期权

A foreign currency option is a contract giving the option purchaser (the buyer) the right 权利, but not the

obligation 责任, to buy or sell a given amount of foreign exchange at a fixed price per unit for a specified time period (until the maturity date).

5.Currency board arrangements (one of IMF’s Exchange Rate Regimes)货币局制

A monetary regime based on an implicit legislative commitment 隐含法律承诺to exchange domestic currency

for a specified foreign currency at a fixed exchange rate , combined with restrictions on the issuing authority 货币发行当局to ensure the fulfillment of its legal obligation 法律责任.

6.Managed floating with no preannounced path for the exchange rate (one of IMF’s Exchange Rate

Regimes)无事先宣告路径的管理浮动汇率

The monetary authority 货币当局influences the movements of the exchange rate through active intervention 积极干预in the foreign exchange market without specifying 说明, or precommitting 事先承诺to, a preannounced path for the exchange rate.

7.Independent floating (one of IMF’s Exchange Rate Regimes)独立浮动

The exchange rate is market-determined 由市场决定, with any foreign exchange intervention aimed at moderating 缓和the rate of change and preventing undue fluctuations 过度波动in the exchange rate, rather than establishing a level 确定、建立一个水平for it.

8.Eurocurrencies欧洲货币(pp.53-54)

Eurocurrencies are domestic currencies of one country on deposit in a second country.

9.Eurodollars欧洲美元

U.S. dollars deposited outside the United States

10.Eurobanks欧洲银行(p.54)

Banks in which Eurocurrencies are deposited.

11.Eurocurrency Interest Rates: LIBOR (pp.54-55)

In the Eurocurrency market, the reference rate of interest is the London Interbank Offered Rate (LIBOR).

12. Hedging

Hedging is the taking of a position 新建 – either acquiring a cash flow, an asset, or a contract (including a forward contract) – that will rise (or fall) in value and offset a fall (or rise) in the value of an existing position 现存.

13. American option 美式期权 gives the buyer the right to exercise the option at any time between the date of writing 认购 and the expiration 到期 or maturity date.

14. European option 欧式期权

can be exercised only on its expiration date, not before.

Part 2 - Answer the following questions:

1. What are the functions of the foreign exchange markets?

● The mechanism 机制 by which participants transfer purchasing power 购买力 between countries

● Obtain or provide credit 信贷 for international trade (and investments) transactions 国际贸易和投资业务 ● Minimize exposure 暴露程度 to the risks of exchange rate changes

2. What is the Interest Rate Parity (IRP)? 利率平价

⏹ The theory of interest rate parity (IRP) provides the link between the foreign exchange markets and the

international money markets.

⏹ The difference in the national interest rates for securities 证券 of similar risk and maturity should be equal to,

but opposite in sign to, the forward rate discount or premium for the foreign currency, except for transaction costs.

3. What are the differences between currency futures and currency forward contracts? Currency Futures and Forwards Compared (p.200)

Characteristic Foreign Currency Futures

Forward Contracts Size

Standardized Any size desired Maturity

Fixed, longest: one year Any up to 1 y., sometimes longer Location

On an organized exchange By telecom linkages Pricing

Open outcry process By bid and ask quotes Margin

Initial margin that is marked to market on a daily basis No explicit collateral, but standard bank relationship necessary Settlement

Rarely delivered upon; normally through purchase of offsetting position Normally delivered upon, offsetting positions is possible. Commissions

Single commission No explicit commission; banks earn through the bid-ask spreads. Trading hours During exchange hours; some 24 hours.

Negotiated by phone or internet, 24 hours.

Counterparties Unknown to each other In direct contact.

Liquidity

Liquid, relatively small. Liquid, relatively large.

4. What is the key factor that attracts both depositors and borrowers to the Eurocurrency markets?

The narrow interest rate spread within that market. The difference between deposit and loan rates is often

less than 1%.