2701 TB CHAPTER 9 Essay

Submitted By Jialing-Liu
Words: 413
Pages: 2

尽管有外汇市场的存在,但国际公司并不是经常会承受汇率变换而带来的损失 two functions of foreign exchange market: convert currencies, and provide insurance to reduce foreign exchange risks.
GOLD HEDGING strategy 黄金保值 ­ to against changes in price of gold.
A strong dollar will cause less demand for a country’s exports.
Spot exchange ­ when exchanges happened immediately. Also is the daily rate
Currency swap ­ exchanges happened in different two days.
Brazil, the real Great Britain, the pound
Arbitrate仲裁 ­ occurs when an investor purchases securities in one market for immediate resale in another 现买现卖, buy currency at low price and sell it at high price.
4 trillion dollars are traded every day
2007, CAD ranked at 27th dollar buy more francs ­
­ discount dollar buy less francs ­
多买少 ­ premium
London is between Tokyo and New York
Three main factors to affect the future exchange rate movements: inflation rate, interest rate and market philosophy.
Bolivia, money supply.
Impediments ­ 障碍, 高效率的市场对自由流动的商品和服务是没有障碍的
indicates that relatively efficient markets make the “basket of goods” should roughly equivalent in differet country.
based on the law of one price
relatively efficient market also has l ess impediments for international trade and investment exist.
PPP indicates the high inflation rate will see deprecation(弃用)in its currency exchange rate, and changes in relative prices will result in a change in exchange rates.
PPP is best predict exchange rate changes for countries with very high rates of inflation and underdeveloped capital markets
International Fisher Effect: same spot exchange rates but different interest rates. self­fulfilling prophecies 投资者对未来的预期汇率倾向于成为
efficient market school believe investing in exchange rate forecasting services would be waste time
, as the forward exchange rate