their own transportation capability.
4. 作为一个社会，我们现在的生活比完全自给自足时更富裕，更休闲。
As a society, we enjoy a richer and more leisurely life than we would be in a totally self-sufficient community.
5. 最近几年运输功能引人注目的另一个因素就是越来越多的使用零库存系统。
这种系统是以公司保持很少数量的生产投入的生产方式为基础的。
Another factor that has thrusted the transportation function into the limelight in recent years is the growing utilization of just-in-time inventory systems, on the basis of a production approach in which the firm maintains very small quantities of production inputs.
Lesson 15 Insurance (I)
Business Knowledge: (1) Definition of insurance
(2) The idea of a known premium vs. the uncertainty of risk
(3) The common pool and the advantages enterprises can gain from it (4) Insurance for overseas trade
A. Necessity B. Function Terms:
1. Insured被保险人，保户: The person who transfer risk.
2. Insurer承保人: The person or a company who assume risk (the insurance
company, the underwriter). 3. Claim索赔
4. Client客户，主顾 5. Margin保证金 6. Draw提取，支取 7. Jeopardy危险，风险 8. Literature文献，说明书
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9. Underwriter保险公司
10. Known premium已知的保险费 11. Pool统筹的资金，共同的款项
12. Cargo insurance货物保险: It is an activity aimed at moving the burden of risk
from the shoulders of the exports and importers, and placing it upon the shoulders of specialist risk-bearing underwriters.
13. Marine insurance海上保险: The insurance of ships and their cargoes.
14. Insurance保险: It is a social device in which a group of individuals transfer risk
and provides for payment of losses from funds contributed by all members who transferred risk.
15. Values exposed to loss损失的价值 16. Release of funds腾出资金 17. Broker经纪人
Answer the following questions:
1. What is meant by “potential loss” in the second paragraph? A: Potential loss means a great deal of uncertainty risk.
2. Without insurance what kind of uncertainty maybe experienced by an
individual or an enterprise?
A: Without insurance, there would be a great deal of uncertainty experienced by an individual or an enterprise, not only as to whether a loss would occur, but also as to what size it would be if it did occur.
3. “There will be some variation in claim costs from year to year and the
premiums include a small margin to build up a reserve upon which the company can draw in bad years.” Paraphrase the above sentence and explain especially the implication of “bad years”. A: The year that the claim costs is rising.
4. What are the functions of insurance?
A: Insurance is a risk transfer mechanism, whereby the individual or the business enterprise can shift some of the uncertainty of life onto the shoulders of others.
5. What is transportation insurance? Why is it so important?
A: It is an activity aimed at moving the burden of risk from the shoulders of the exports and importers, and placing it upon the shoulders of specialist risk-bearing underwriters.
Similarly the time lag is great between production and consumption. In bridging both the geographical gap and the time gap serious risks have to be run. And it is in this framework that the insurance underwriters operate to carry the risks which otherwise would have to be borne by the producers.
6. Do you think it is necessary to change the term “marine insurance” in to
“transportation insurance”? Why and why not?
A: Yes. Goods do not go overseas solely by sea-air transport takes and increasing share of cargo these days.
7. Why do businessmen like to pay a premium into an insurance pool even
though trade did exist when there was no method of insurance available in the past?
A: The premium payable to an insurer, however, would only be a small proportion of the fund required because of the pooling arrangements, and so most of this money could be invested in new plants, buildings or stock.
8. Explain the underlined expression in the sentence “He does not want to scoop
the pool”.
A: He would prefer his cargoes to reach their destination safely.
Translate the following sentences into English:
1. 保险是一种风险转移机制。通过保险个人或企业可以将生活中一些不确定因
素转移给其他人。
Insurance is a risk transfer mechanism, by which the individual or the business
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enterprise can shift some of the uncertainty of life onto the shoulders of others.
2. 即使是在这种情况下，大多数公司宁可付已知的费用即保费来转移风险，而
不愿面对不确定的风险损失。
Even in these circumstances the majority of firms prefer to pay a known cost or premium for the transfer of risk, rather than face the uncertainty of carrying the risk of loss.
3. 对企业来说损失的价值要比个人高很多。因此保险费也比一栋房子或一辆车
高出许多。
In the case of business enterprises, the values exposed to loss are usually much higher and the premium charged is substantially higher than that for a house or a car.
4. 企业投保的主要刺激是他们可以腾出资金，进行其他项目的投资。
The main stimulus to enterprise is the release of funds for investment in the production of other items.
5. 货物保险是一种目的在于把风险从进口商和出口商的肩上转移到专门承担
风险的保险人一方的活动。
Cargo insurance is an activity aimed at moving the burden of risk from the exports and importers to the underwriters.
Lesson 16 Insurance (II)
Business Knowledge:
(1) Three main principles of insurance
A. Insurable interest B. Utmost good faith C. Indemnity
(2) Two sub-principles of insurance
A. Contribution B. Subrogation
(3) The doctrine of proximate cause
(4) Three basic types of marine insurance
A. Free from particular average (F.P.A.) B. With particular average (W.A.) C. All risks Terms:
1. Port of origin始发港 2. Voidable无效的
3. Indemnity赔偿原则: It holds that a contract of insurance is one, which restores a
person who suffered a loss into the same position as he was before the loss occurred. 4. Ruin破产
5. Insurable interest可保利益: It holds that no one may insure anything unless he
has and interest in it. (Which means that if the thing insured is preserved he will derive a benefit form its preservation, but if it is any way damaged or lost the assured will be adversely affect.) 6. Terms of sale价格条件、买卖条款 7. All Risks全险、一切险、综合险
8. Principle of utmost good faith最大诚信原则：The people who decide what
premium is fair for a particular cover do so on the basis of written statements made in a proposal form. 9. Subrogation代位求偿原则
10. Contribution分摊原则: It holds that a person cannot be allowed to insure twice
for the same risk, and claim compensation from both insurers. If two policies do cover the same event, the insurance companies contribute pro rata to the loss, and the insured is only restored to the indemnity position.
11. Proximate cause of the loss近因原则: It means that when an insurance policy is
made out to cover a certain risk, a claim becomes payable only if that risk occurred as the proximate (closest) cause of the loss suffered. 12. Forwarding charges转运费
13. F. P.A.平安险: Free from particular average
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14. W.P.A. (Or W.A.) 水渍险: With particular average 15. Adversely affected受到负面影响
16. Force majeure不可抗力: Social or natural calamities that take place beyond the
control of a contraction party. Answer the following questions:
1. What are the basic principles of insurance that firms must follow when they
seek cover for goods?
A: Three main principles of insurance
a. Insurable interest b. Utmost good faith c. Indemnity
Two sub-principles of insurance a. Contribution b. Subrogation
The doctrine of proximate cause
2. Can you give some examples to illustrate “insurable interest”?
A: You can insure your own car, for if it is damaged you will have to pay for it to be repaired and consequently you will suffer a loss. You cannot insure your neighbor’s car, for if it is damaged you will not suffer any loss.
3. How important is insurable interest?
A: Every contract of insurance requires an insurable interest to support it, or otherwise it is invalid and any claim made upon it will not be entertained.
4. What is the most important fact about “utmost good faith”?
A: The people who decide what premium is fair for a particular cover do so on the basis of written statements made in a proposal form. If this statement is untrue, then the premium agreed on will not be a fair one. Even though the mis-statement was unintentional, the underwriter would still be deceived and the policy voidable.
5. How are cargo policies usually calculated for values to be covered?
A: In Cargo policies the compensation payable generally includes the invoiced cost plus freight, the insurance premium, and an agreed percentage, say 10%.
6. Will the insurer compensate the claim for loss for which the risk covered is
not the proximate cause?
A: The insurance company will not entertain the claim if the risk covered is not the proximate cause of the loss.
Translate the following sentences into English:
1. 没有可保利益的保险合同是无效的。而任何根据这类合同提出的索赔都不会
被受理。
An insurance contract without insurable interest to support is invalid, and any claim made upon it will not be entertained.
2. 尽管错误的陈述是无意的，但保险人还是受到欺骗。从而保险合同无效。 Even though the mis-statement was unintentional, the underwriter would still be deceived and the policy voidable.
3. 将受损失人的利益恢复到损害发生前的状况的合同就是保险合同。
A contract of insurance is one that restores a person who suffered a loss into the same position as he was in before the loss occurred.
4. 赔偿金额一般包括发票金额加上运输费用及保险费再加上一个商定的百分
比，如10%。
The compensation payable generally includes the invoiced cost plus freight, the insurance premium, and an agreed percentage, say 10%.
5. 如果投保的险别不是造成损失的直接原因，保险公司将不予赔偿。
The insurance company will not entertain the claim if the risk covered is not the proximate cause of the loss.
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Lesson 17
International Monetary System and Exchange Rate
Business Knowledge:
(1) The international monetary system
A. Sterling-based gold standard B. Dollar-based gold standard C. The floating system (2) Exchange rate
A. Fixed exchange rate B. Flexible exchange rate
C. Major factors influencing exchange rate
a. International balance of payment b. Inflation c. Interest rate
D. Common measures for intervention in exchange rate
a. Buying or selling foreign currency b. Raising or lowering discount rate c. Foreign exchange control
E. The pros and cons of the two different kinds of exchange rate F. Direct quote and indirect quote
G. Buying price, selling price medial price
Terms:
1. Exchange rate汇率、兑换率: It refers to the price at which one currency can be
exchange for another currency. 2. Gold standard金本位制 3. Peg钉住、挂钩
4. Reserve currency储备货币
5. Clean float清洁浮动、自由浮动 6. Dirty float肮脏浮动、管理浮动 7. Discount rate贴现率
8. Idle funds游资、热钱、闲置资金
9. Direct quote / quotation（汇率）直接标价: A direct exchange rate is the price of
a foreign currency in terms of the home currency. 1美元=6.8元 外币为基准 10. Indirect quote / quotation（汇率）间接标价: An indirect exchange rate is the
price of home currency in terms of a foreign currency.
11. Buying rate买入价: It refers to the rate by which a commercial bank buys a
currency.
12. Selling rate卖出价: It is the rate by which a bank sells a currency.
13. Medial rate中间价 It is the average of the buying rate and the selling rate. 14. Par value平价（货币的票面价格） 15. Great Depression大萧条
16. SDRs 特别提款权: Special drawing Right 17. BOP国际收支: Balance of Payment
18. BOP deficit / favorable BOP 国际收支赤字/国际收支盈余（顺差） 19. Foreign exchange control外汇管制
20. Fixed exchange rate / Flexible exchange rate固定汇率/浮动汇率 21. Pro rata按比例
Answer the following questions:
1. Explain briefly the meaning of the gold standard? What kind of exchange
rate system did it create?
A: The earliest international monetary system was known as the gold standard under which countries pledged to change their paper currencies into gold when requested to do so.
The gold standard created a fixed exchange rate system as each country pegged the value of its currency to gold to establish its par value.
2. How much can you tell about the Bretton Woods Conference? What is meant
by “adjustable peg”?
A: The Bretton Woods Conference established a US dollar based gold standard. Because of the dominating economic and political influence of the United Stated.
Under the new fixed exchange rate system, each participant promised to maintain
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the par value of its currency, allowing a fluctuation of only one percent. “Adjustable peg” means the country concerned had to intervene if the market value of its currency goes beyond the range. Under special circumstances, a country was allowed to adjust the par value of its currency.
3. What is the Special Drawing Right? How was it created?
A: Special Drawing Right, SDRs for short is also called paper gold. It is used to settle official transactions at the IMF.
SDRs were created for reducing the demand for the dollar as a reserve currency.
4. What are the major factors that may influence the exchange rate? Explain
briefly.
A: (1) International balance of payment. The value of one’s own currency will go up with favorable balance of payment and drop with BOP deficit.
(2) Inflation. When inflation intensifies, the value of the currency will drop relative to foreign currencies and vice versa.
(3) Interest rate. Under specific conditions, high interest rate will attract short term international fund, increasing the exchange rate of one’s own currency and vice versa.
5. What is meant by clean float and dirty float? What are the common
measures taken for intervention in exchange rate?
A: Clean float or free float means the government takes no various measures to intervene in the price of its currency. By the contrast, it is called managed float or dirty float.
6. Illustrate the respective advantages and disadvantages of the flexible
exchange rate system and the fixed exchange rate system.
A: The fixed exchange rate system reduces the riskiness of international business and is also an important measure to curb inflation. However the system is vulnerable to disorderly changes in currency value.
Flexible exchange rate can also protect domestic currency form the impact of foreign idle funds and helps to prevent the drain of foreign exchange reserve. But