【正文】 addition to making outright purchases and sales in the secondary market, entities with money to invest for a brief period can acquire a security temporarily, and holders of debt instruments can borrow short term by selling securities temporarily. These two types of transactions are repurchase agreements (RPs) and reverse RPs, respectively. In the wholesale market, banks and government securities dealers offer RPs at petitive rates of return by selling securities under contracts providing for their repurchase from one day to several months later6） BAs 7） CDs (reference to )8） Eurodollar Eurodollars are . dollar deposits at banking offices in a country other than the United States.9） Eurobank Eurobanks—banks dealing in Eurodollar or some other nonlocal currency deposits, including foreign branches of . banks— originally held deposits almost exclusively in Europe, primarily London. While most such deposits are still held in Europe, they are also held in such places as the Bahamas, Bahrain, Canada, the Cayman Islands, Hong Kong, Singapore, and Tokyo, as well as other parts of the world.10）LIBOR (reference to Certificates of Deposit)London interbank offer rate11）mortgagebacked securities12）Eurobond market (details make reference ) The Eurobond market, centered in London, is an offshore market in intermediate and longterm debt issues. It serves as a source of capital for multinational corporations and for foreign governments. It developed after the United States instituted the interest equalization tax in 1963 to stem capital outflows inspired by relatively low . interest rates.2. True or False1) true 2) true 3) true3. Discussions1) Describe the characteristics of Interest Rate Swap and the role of it in the bankrelated financial market.2) What risks are encountered in the swaps markets? 3) Discuss one or two specific examples of derivative products and their use.4. Translations1) Markets dealing in instruments with maturities that exceed one year are often referred to as capital markets, since credit to finance investments in new capital would generally be needed for more than one year. The time division is arbitrary. A longterm project can be started with shortterm credit, with additional instruments may need to be renewed before a project is pleted. Debt instruments that differ in maturity share other characteristics. Hence, the term “capital market” could be –and occasionally is applied to some shorter maturity transactions.2) The secondary market for Treasure securities consists of a network of dealers, brokers, and investors who effect transactions either by telephone or electronically. Telephone trades are generally between dealers and their customers. Electronics trading is arranged through screenbased systems provided by some of the dealers to their customers. It allows selected trades to take place without a conversation. When dealers trade with each other, they generally use brokers. Brokers provide information on screen, but the final trades are made by telephone.Chapter 13 Concepts of Financial Assets Value 金融資產(chǎn)價值的概念1. Key Terms 1) absolute measure of value An absolute measure of value is used when one must pare it to a nominal amount: purchase price, amount to invest, target sum of money to raise2) relative measure of value A relative measure of rate of return is more convenient to use when one wishes to pare one financial asset to a set of numerous alternative assets. A rate of return is the most monly used relative measure of value.3) discounting Future benefits must be discounted (or converted) to their present (or today39。s) value, before they are summed. Discounting is part of the study of time value of money, or actuarial mathematics, and a plete treatment of it can be found in specialized textbook.4) time value of moneyTime value of money studies how amounts of money are made equivalent over time. Converting amounts today into their future equivalent consists in adding interest to principal, . pounding. Converting amounts in the future into today39。s equivalent consists of charging an interest, . discounting. Thus, discounting is the exact inverse of pounding.5) FV 6) PV 7) annuity 8) short term securitiesShort term securities (. securities with maturity less than one year) are sold at a discount (. nominal value less the interest to be earned over the remaining number of days to maturity). There is no coupon, and no additional benefits such as conversion right, but there may be a penalty for early redemption in the case of some bank certificates of deposit.9) P/E ratio (make reference to Earnings Multiple or P/E Ratio)Another approach which is used as a shortcut by a large number of investors, is the earnings multiple. It is sometimes referred to as earnings multiplier, and it is most monly known as pricetoearnings or P/E ratio. In many instances, the approach, rather than being an oversimplification, can be an improvement over the previous format. In its most mon presentation, the idea is that the price P of a share should be a multiple m of its earnings per share E. The multiple m is an industry average because it is assumed that all panies in an industry face similar marketing, technological and resource challenges, and thus, should have similar organizational and production patterns.10) intrinsic value intrinsic value, or difference between market price of the underlying stock and strike price (which is also known as exercise price because it is the price at which an option holder can buy from or sell to the option writer the underlying stock through the options exchange)。11) NPV Any financial decision can be looked upon as a determination of whether what is put in today (. purchase price of a stock, amount of loan applied for or initial outlay of a project) is greater or smaller than what is received back (. discounted value of fu