(2) The floating exchange rate regime can be divided into free floating and managed floating. Free floating means that the monetary authorities hardly intervene in the foreign exchange market and the exchange rate fluctuates with market supply and demand. Managed floating means that the monetary authorities take various measures and means to influence the foreign exchange market and make the exchange rate conducive to their economic development. 3. Translate the following passages into Chinese
(1) 实行钉住汇率制的国家往往具有不成熟的资本市场和薄弱的监管机构。因此钉住汇率制可以帮助他们在这样的条件下创造稳定。要维持浮动汇率制必须有一个更强大的制度和成熟的市场。当一国被迫对货币贬值时，它也被要求进行某种形式的经济改革，如提供更高的透明度，以努力巩固其金融机构。 (2) 与中央银行不同，货币局并不持有那些可以赚取利息和产生利润的银行存款。因此，货币局不是银行体系的最后贷款人：如果一家银行要倒闭，货币局是不会解救它的。尽管商业银行不一定被要求持有甚至1%的准备金以抵补债务（对存款的提取），但是一些人认为，在传统的货币局制度下，很少看到有商业银行破产。
Unit 11 Federal Reserve System
1. Answer the following questions based on the text
(1) The seven-member Board of Governors is the head of the Federal Reserve System.
The seven governors are appointed by the President but have to be confirmed by the Senate. They serve non-renewable 14 years, with one governor’s term expiring every other January. This design is intended to insulate the governors from the political pressures.
(2) The responsibilities of the Board members include: a) to formulate monetary
policy; b) to set reserve requirements and effectively control over the discount rate by the “review and determination” process; c) to regulate and supervise banks that are members of the Federal Reserve System, bank holding companies, international banking facilities in United States, Edge Act and agreement corporations and so on; d) to ensure the smooth functioning and continued development of the nation’s vast payment system; and e) to be responsible for the development and administration of regulations that implement major federal laws governing consumer credit.
(3) Edge Act Corporation means a subsidiary of a bank or a bank holding company or
financial holding company that is chartered by the Federal Reserve under Section 25A of the Federal Reserve Act, as amended in 1916, to engage in foreign banking activities. Agreement Corporation means a financial institution chartered
by a state to engage in international banking services and the institution “agrees” with the Federal Reserve Board to limit its activities to those allowed an Edge Act corporation.
(4) The FOMC itself does not carry out securities purchases or sales; instead, it issues
directives to the trading desk at the Feral Reserve Bank of New York, where the manager for domestic open market operations supervises those who execute the purchases and sales of the government or agency securities. The manager communicates daily with the FOMC members and their staffs concerning the activities of the trading desk.
(5) The primary responsibilities of Federal Reserve Banks include: a) clearing checks;
b) issuing new currency; c) withdrawing damaged currency from circulation; d) administering and making discount loans to banks in their districts; e) evaluating proposed mergers and applications for banks to expand their activities; f) acting as liaisons between the business community and the Federal Reserve System; g) examining bank holding companies and state-chartered member banks; h) collecting data on local business conditions; and i) using their staffs of professional economists to research topics to the conduct of monetary policy. (6) Discount window is an instrument of monetary policy that allows eligible
institutions to borrow money from the central bank, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions. Institutions like commercial banks, mutual savings banks, savings and loan associations, and credit unions that subject to reserve requirements set by the Fed, are allowed to use the window.
(7) Since no interest was paid on reserves deposited at the Federal Reserve banks, it
was costly to be a member of the system, and as the interest rates rose, the relative cost of membership rose, and thus more and more banks left the system. 2. Translate the following passages into English
(1) Three tools can be used by the Fed to adjust and control the U.S. economy. First, the Fed buys and sells American Treasury securities to curb inflation or stimulate deflation. When it buys securities, money supply will increase; when it sells securities, money supply will decrease. The deals happen virtually every day. Second, the Fed may require commercial banks to reserve a certain percentage of money as “reserve”. The reserve can be vault cash or deposited in special account of the Fed’s “reserve settlement”. As banks cannot use reserves, the Fed can change the reserve requirement ratio to guide banks to lend more or less money to the market. Third, the Fed will set a discount rate at which banks can borrow money from the Fed. Banks can turn to the discount window of the Fed for loans
so that they will have more funds for lending.
(2) European Central Bank is the world’s first central bank to manage a supranational currency. Independence is its distinctive feature. Neither does it accept the directives of the EU governing body, nor is it subject to the supervision of governments of EU members. It is the only qualified institution that is allowed to issue the euro within the European Union. When it was established, there were 11 members within the euro zone. By the end of January 2009, the number of euro zone members had increased to 16.
3. Translate the following passages into Chinese
(1) 国际清算银行是促进国际货币和金融合作的经济组织，是一家为各国中央银行服务的银行。国际结算银行主要作为促进各国中央银行和国际金融机构之间研讨和政策分析的论坛、经济与货币研究的中心、在金融交易中的中央银行的主要对手方、以及与国际金融业务联系的代理人或受托人等，来实现其职能。
(2) 在合适的情况，各中央银行与相关监管当局合作，将采取最有效的步骤来促使国内市场私营部门未来两年内有令人满意的行为。此外，在适当或可行的情况下，各中央银行将落实或寻求实现各国支付系统的关键性的提升，并将考虑采取其他措施，以促进为降低私营部门风险而做出的努力。这使人们认识到可能需要公共当局鼓励单个银行和行业团体的行动，并与这些团体合作以取得及时的并且是整个市场的进步。
Unit 12 Financial Futures
1. Answer the following questions based on the text
(1) A future contract is a standardized, transferable, exchange-traded contract that
requires delivery of a commodity, bond, currency or stock index at a specified price on a specified future date. Financial futures are futures contract based on financial instruments, such as Treasury bonds, certificates of deposit, currencies or indexes.
(2) Long position means the situation in which an investor purchases the financial
futures and holds them in anticipation of a price increase. Short position means the situation where the investor promises to sell a certain quantity of a good at a particular price in the future.
(3) Currency futures are traded via exchanges, such as the Chicago Mercantile
Exchange, but the currency markets are traded via currency brokers and are therefore not as controlled as the currency futures. As currency futures are based upon the exchange rates of two currencies, they are settled in cash, in the underlying currency.
(4) IMM is the abbreviation of International Monetary Market, a division of Chicago
Mercantile Exchange.
(5) An interest rate future contract is a future contract whose underlying assets are
different interest-bearing instruments like T-Notes, T-Bills, T-Bonds, deposits, and so on. By selling interest rate futures, known as short hedging, an investor can protect himself against an increase in interest rates; by buying interest rate futures, known as long hedging, an investor can protect himself against a decline in interest rates.
(6) Stock index futures, or index futures, are futures contracts where the underlying
commodity is a stock index, such as the Dow Jones or the FTSE100. “Tick” is the minimal increment that futures contracts move in. 2. Translate the following passages into English
(1) Bonds futures, as a kind of interest rate futures, is a standardized contract whereby
both parties promise to buy and sell a specified quantity of certain interest rate related products at the agreed price on a future date. The interest rate related products are usually medium to long-term bonds. The commodity mix of bonds futures in CBOT is the most complete one, including short, medium, and long-term U.S. Treasury bond futures contracts. Its shortest contract is 2 years and the longest 30 years, and the 10-year contract is of the largest trading volume. (2) Investors in stock investments are faced with two risks: systematic risks and
non-systemic risks. Investors can better avoid non-systemic risks by investment portfolios, but cannot effectively avoid the stock market decline caused by systemic risks. Stock index futures allows investors in the stock market and stock index futures market to do the opposite operations to offset the risks of price fluctuation.
3. Translate the following passages into Chinese
(1) 在芝加哥交易所有两种交易方法：公开喊价和电子平台。公开喊价的方法是由在交易所的交易池内的交易员喊出订单、报价以及特定商品的数量。交易员身穿不同颜色的马夹来表示他们在场内的不同职能（交易商、跑单者、芝加哥交易所的员工等）。他们通常会运用复杂的手势。交易池是交易所内较低的区域以便于沟通，并且根据交易量的情况可以升降。
(2) 由于对未来12个月通胀的低估，巴西的利率期货收益率下降，促使经济学家下调明年年末基准利率的预测。在隔夜利率期货市场，2011年1月到期的合约收益率下降4个基点，即0.04个百分点，在纽约时间下午5:01至9.77%。根据彭博数据，于2011年1月到期的当地货币零息债券收益率下降4个基点至9.87%。
Unit 13 Financial Statements
1. Answer the following questions based on the text
(1) A balance sheet consists of three parts: assets, liabilities, and shareholder’s equity. (2) An income statement can be divided into operating section, non-operating section, irregular items, and earnings per share.
(3) It is an accounting technique used by firms to assess the profits earned by their investments in other companies. The firm reports the income earned on the investment on its income statement and the reported value is based on the firm’s share of the company assets. The reported profit is proportional to the size of the equity investment. This is the standard technique used when one company has significant influence over another, usually 20-50% in associate companies. (4) The most commonly used format for the cash flow statement is to divide it into three sections: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.
(5) The direct method and the indirect method. Under the direct method, you are basically analyzing your cash and bank accounts to identify cash flows during the period. But under the indirect method, you are basically analyzing your income and expense accounts, and working capital. 2. Translate the following passages into English
(1) The formation of accounting is influenced by its environment. Different countries
have different accounting systems as they have different political, economic, and cultural systems. A country’s accounting system evolves as a response to the country’s demand for accounting information. In many European countries, the government regulation requires that enterprises announce detailed information of training and employment policies, while the United States has no similar requirement.
(2) Cash flow statement reflects the inflows and outflows of cash and cash
equivalents of an enterprise in a certain accounting period. It is one of the three basic financial statements which expresses the increase and decrease of cash (including bank deposits) in a fixed period (usually monthly or quarterly). It mainly reflects the impacts of various items in the balance sheet on cash flows, and can be divided into the three categories as operating, investing and financing according to their uses.
3. Translate the following passages into Chinese
(1) 金融行动特别工作组是一个政府间的跨国机构，其宗旨是发展和推动国内国
际政策，以打击洗黑钱及恐怖分子筹资的活动。金融行动特别工作组监控各成员国在实施必要措施上的进展，审核它们检查洗钱及恐怖分子筹资活动的