International Finance——国际金融笔记概要1.doc

International Finance CHAPTER 1 Balance of payments: the balance of payments is a record of the economic transactions between the residents of one country and the rest of the world. Nations keep record of their balance of payments over the course of a one-year period. 3 major accounts: current, capital, financial Current account: the current account of the balance of payments refers to the monetary value of international flows associated with transactions in goods, services, income flows, and unilateral transfers. Include: (1) merchandise trade (goods and services), (2) income receipts and payments, (3) unilateral transfers Double-entry accounting：The arrangement of international transactions into a balance-of-payments account requires that each transaction be entered as a credit or a debit. (+) a credit transaction is one that results in a receipt of payment from foreigners. (-) a debit transaction is one that leads to a payment to foreigners. CHAPTER 2 Foreign-exchange market: the foreign-exchange market refers to the organizational setting within which individuals, businesses, governments, and banks buy and sell foreign currencies and other debit instruments. Foreign-currency options: foreign-currency options provide an options holder the right to buy or sell a fixed amount of foreign currency at a prearranged price, within a few days or a couple of years. The options holder can choose the exchange rate he or she wants to guarantee, as well as the length of the contract. A call option gives the holder the right to buy foreign currency at a specified price. A put option gives the holder the right to sell foreign currency at a specified price. Exchange-rate determination 章节整体 Demand for foreign exchange Supply of foreign exchange 易忘记混淆 Equilibrium rate of exchange Nominal and real exchange rates Nominal exchange rates do not reflect changes in price levels in trade partners. Real exchange rate embodies the changes in prices in countries in the calculation. (Both