金融英语重点题目

湖北经济学院

Assignment

1. Does the Barter system have any disadvantage that makes it disappear nowadays?

Yes {补充 Barter

—exchange goods with goods.

Such as:Goat, stone, ox, salt, shell,peal, jade,iron,……

Disadvantages of Barter

2. What is money and its functions?

Money can be described as any commodity or token that is generally acceptable as a means of payment for goods or services or in the repayment of debt.

Functions

Medium of exchange

Unit of account

Store of value

3. What does contribute the monetary aggregates?

. M0 现金(currency—paper money and coins)

. M1 狭义货币供应量=M0(currency—paper money and coins)+活期存款(demand deposit)

. M2 广义货币供应量=M1+定期存款(time deposit)+储蓄存款(savings deposit)+其他存款+货币市场共同基金

. M3=M2+大额定期存款和期限存款

4. What is the differences between interest rate and yield?

In finance ,the yield carre is the relation of between the interest rate and time to maturity of the debt for a given borrower in a given currency.

5. Please briefly introduce some about the motives which could determine the demand for

liquidity according to Keynes.

The transactions motive 交易动机 The precautionary motive预防 Speculative motive投机

6. What kinds of factors could be used to explain the risk structure of interest rates? And briefly

describe the relation between each factor and the risk structure of interest rates?

Default Risk

Risk Premium

Liquidity Risk

Tax Considerations Deterioration Indivisibility Inefficient and Protracted (rate of exchange) Double coincidence of wants silver, gold overcame such shortcomings}

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7. What's difference between expansionary and contractionary monetary policy?

an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it.

8. What are the goals of monetary policy?

the promotion of sustainable economic growth full employment stable prices Stable balances of payments

9. Briefly describe the characteristics of open market operation?

Initiative

Open market operations could be fully controlled by the central bank.

Flexibility

The released or absorbed amount of money also is a decision coming from the central

bank.

Timeliness

The buying or selling proposals could be transacted immediately. Thereby, the excess

reserves of different financial institutions involving open market operations will be accordingly changed. The open market operations also could be frequently, continuously and reversely.

10. What do you think about the limitation of rediscounting policy?

Rediscounting policy is not an ideal option for controlling the money supply.

First，central banks always are rediscounted by those commercial banks.

Besides, rediscounting rate will be regulated within a minimum and maximum.

And, if commercial banks extensively depends on rediscounting policy for a long time, it’d put a lot of pressures on central banks, thereby, the ability of central banks to control the money supply will be further weakened.

11. What are some disadvantages to issuer during asset securitization?

Portfolio quality, costs , size limitations

12. How to define the money market? What are basic functions of money market?

Define: The money market is used by participants as a means for borrowing and lending in the

short term, from several days to just under a year.

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Functions: Fulfill the short-term need from central government

Provide a good choice for central bank conducting open market operations

Make a default-free investment tool for market investors

function

They have low default risk

They are usually sold in large denominations (面额)

13. Which of the money market securities is the most liquid and considered the most risk-free?

（五~~67）Why?（一~~90）

Treasury Bills Treasury Bills ,because it is issued by government and backed by its full faith and credit.

Fuctions

Fulfill the short-term need from central government

Provide a good choice for central bank conducting open market operations

Make a default-free investment tool for market investors

By contrast, U.S. Treasury bonds have usually been considered to have no default risk because the federal government can always increase taxes to pay off its obligations. Bonds like these with no default risk are called default-free

14. What are differences between CDs and ordinary time deposit?(五~~64,65)

Instrument— Negotiable Certificates of Deposit

Actually it’s a kind of time deposits with some differences to traditional time deposits.

1. It’s also called a bearer instrument with the trait of negotiation

2. Fixed denomination

3. It’s a relatively short-term security.

4. It’s normally traded by using the floating interest rate.

Instrument— Negotiable Certificates of Deposit

A negotiable certificate of deposit is a bank-issued security that documents a deposit and

specifies the interest rate and the maturity date

15. What was the purpose motivating regulators to impose interest ceilings on bank savings

accounts? What impact did this eventually have on the money markets?

For banks could pay for funds .banking profits were assured

16. Distinguish between competitive bidding and noncompetitive The central bank can be directly involved by monetary policy instruments

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bidding for T-Bills.（五~~73）

区别：标书内容不一致 竞争：标价，申购数量（has a price and explain the quantity） 非竞争：只有数量无标价(explain the quantity)

A party can purchse T-bills during a T-bills auction noncompetive bid via.with competitive bid, The party specifies the discount rate that he is willing to accept.

17. Contrast investors’ use of capital markets with their use of money market.( 对比对资本市场

的投资者’用途以对金融市场的他们的用途。)

Money market is a market for short-time securities and capital market for the first of several securities.

18. What are the purposes of credit rating?( 信用评级的目的)

Collection and collation of data

. Analysis of data

Results of rating

19. Why do bondholders need restrictive covenants（六~~14） for corporate bonds?（为什么债

券持有人需要限制性契约为公司债券？）

Characteristics of Corporate Bonds

Restrictive Covenants契约

A corporation’s financial managers are hired, fired, and compensated at the direction of

the board of directors, which represents the corporation’s stockholders.

Since bondholders cannot look to managers for protection when the firm gets into trouble, they must include rules and restrictions on managers designed to protect the bondholders’ interests. There are known as restrictive covenants.

20. What is a sinking fund？（六~~19） Do investors like bonds that contain this feature? And

why?（六~~21,22）

A sinking fund is a requirement in the bond indenture that the firm pay off a portion of the bond issue each year.

No，they do not

It’s possible for bond issuers to buy back their bonds according to the terms of the sinking fund.

21. What are factors that influence the term structure of bonds issuance?

~~47）

1Needs from issuers

2Anticipation of future interest rate And how? （六

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3Conditions of negotiation

4Credit level of issuers

22. What are the rights of stockholders?（六~~62） Dividend Allocation Participation

Preemption of Residual Assets Allocation

23. What do the BOS（六~~66） and BOD（六~~67） do for a company?

1. BOS) and its authority

Board of stockholders is consisted of all the stockholders of a company and is top level authority. Its obligations include:

Operational Policy & Investment Plan

Candidates of Director and Supervisor coming from Employees

Approval of Financial Scheme

Resolution on vital events

2. Board of Directors (BOD) and its authority

Board of Directors is consisted of selected directors from stockholders and about 3-13 members. And it is the corporation and the decision-maker of a company. It directly is responsible for the board of stockholders. Its obligations include:

① Convene the meeting of BOS, Decision Execution

② Formulate all important Schemes about Finance, Operation, Alternation

③ Determine Internal Organizational Structure and Managerial System

BOD

Fulfill goals of Production, Operation, Management and Execute decisions of BOD Detailed Scenarios for Internal Management

Personnel Appointment

BOS

① Supervise and Inspect Behaviors of Finance, Directors, Senior Executives

② Correction, even Lawsuit Requirement for Damage Behaviors

③ Convene Temporary Meeting of BOS

24. What are the similarity(六~~71) and differences（六~~72）between stock and bond? Similar Points

a, Both of those are a means of financing for the government or financial institutions.

b . Both of those are an investment for external investors by getting interests or dividends.

c, Both of those are negotiable and transferable.

Different Points

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1. Stocks represent the equity, whereas, bonds represent the obligation.

2. The risk of stocks is surely 3. The price of stocks fluctuates frequently and acutely than bonds.

4. Bondholders have

25. What's difference between foreign option and foreign swap?（七~~48）

Option 期权交易transaction—the customer’s right to deliver or to take delivery of a specified sum in foreign currency at any time or times during an agreed period.

Swap transaction掉期交易—The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date.

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