Forward Exchange and International Financial Investment

# 第18章 Forward Exchange and International Financial Investment

## 章节概览
Forward Exchange and International Financial Investment This chapter presents the uses of forward foreign exchange rates and the returns and risks of international financial investments, both covered and uncovered. It begins by noting that in many situations people or organizations are exposed to exchange rate risk, because the value of the individual's income, wealth, or net worth changes when exchange rates change unexpectedly in the future.

## 知识点
### 1. Exchange Rate Risk
- 教学说明：This chapter presents the uses of forward foreign exchange rates and the returns and risks of international financial investments, both covered and uncovered. It begins by noting that in many situations people or organizations are exposed to exchange rate risk, because the value of the individual's income, wealth, or net worth changes when exchange rates change unexpectedly in the future.
- 支撑要点：You are exposed to exchange-rate risk if the value of your income or wealth or net worth changes when exchange rates change unpredictably in the future.
- 支撑要点：Hedging
- 支撑要点：is taking an action to reduce your exposure to exchange-rate risk.
- 来源类型：manual

### 2. International Financial Investment
- 教学说明：Forward Exchange and International Financial Investment
- 支撑要点：Forward Exchange and International Financial Investment
- 来源类型：manual

### 3. International Investment With Cover
- 教学说明：This chapter presents the uses of forward foreign exchange rates and the returns and risks of international financial investments, both covered and uncovered. It begins by noting that in many situations people or organizations are exposed to exchange rate risk, because the value of the individual's income, wealth, or net worth changes when exchange rates change unexpectedly in the future.
- 支撑要点：Decisions about international investments are based on the returns and risks of the available investment alternatives.
- 支撑要点：Covered international investment
- 支撑要点：is hedged exposure to exchange-rate risk.
- 来源类型：manual

### 4. International Investment Without Cover
- 教学说明：This chapter presents the uses of forward foreign exchange rates and the returns and risks of international financial investments, both covered and uncovered. It begins by noting that in many situations people or organizations are exposed to exchange rate risk, because the value of the individual's income, wealth, or net worth changes when exchange rates change unexpectedly in the future.
- 支撑要点：The investor is exposed to exchange-rate risk, because the actual return depends on the actual value of the future spot exchange rate, which is uncertain at the time the investment is made.
- 支撑要点：At the time the investment is made, the investor can use the expected future spot rate (
- 来源类型：manual

### 5. Does Interest Parity Really Hold? Empirical Evidence
- 教学说明：It is more difficult to test uncovered interest parity, because we cannot observe the expected future spot exchange rate in the market. (If we use the forward rate as an indicator of the expected future spot exchange rate, then we are really just testing covered interest parity.) Indirect tests of uncovered interest parity suggest that it does not hold as tightly as covered interest parity.
- 支撑要点：Four rates are needed to test for covered interest parity: the current spot exchange rate, the current forward exchange rate, and the current interest rates in the two countries.
- 支撑要点：All of these rates can be seen in the foreign exchange markets and the short-term financial markets.
- 支撑要点：Covered interest parity holds very well, except:
- 来源类型：manual

### 6. The Market Basics of Forward Foreign Exchange
- 教学说明：An investor can compare the return on a covered international investment to the return on a home investment using the covered interest differential (CD). The exact expression is CD = (1 + if) f/e − (1 + i), where the i's are the foreign (subscript f) and domestic interest rates, e is the spot exchange rate, and f is the forward exchange rate.
- 支撑要点：In the forward market, deals are transacted for foreign exchange deliveries to be made at some specified future date (e.g. 30 days, 60 days, 90 days, etc.) Banks provide forward foreign exchange on all currency pairs.
- 支撑要点：The forward exchange market is convenient for large customers and corporations that are viewed by banks as acceptable credit risks.
- 支撑要点：Don’t confuse the forward rate with the future spot rate, the spot rate that will exist at a date in the future.
- 来源类型：manual

### 7. Hedging Using Foreign Exchange
- 教学说明：This chapter presents the uses of forward foreign exchange rates and the returns and risks of international financial investments, both covered and uncovered. It begins by noting that in many situations people or organizations are exposed to exchange rate risk, because the value of the individual's income, wealth, or net worth changes when exchange rates change unexpectedly in the future.
- 支撑要点：Hedging
- 支撑要点：means reducing both kinds of “open” positions in a foreign currency—both
- 支撑要点：long positions
- 来源类型：manual

## 案例
### 案例 1: Eurocurrencies: Not (Just) Euros and Not Regulated: The beginning and ea ...
Eurocurrencies: Not (Just) Euros and Not Regulated: The beginning and early growth of the Eurocurrency market included deposits from the government of the Soviet Union and the governments of Arab oil-exporting countries. These governments did not trust the U.S. government, but they still wanted to hold dollar bank deposits.

### 案例 2: The final section of the chapter presents some evidence on whether ...
The final section of the chapter presents some evidence on whether the various parity conditions actually hold. For several decades up to 2007, covered interest parity holds well between currencies of countries whose governments permit free movements of international capital. Larger deviations from covered interest parity arose during the global financial and economic crisis and then for the euro during the euro crisis.

### 案例 3: 11. a.For the expected future value of the euro, the future ...
11. a.For the expected future value of the euro, the future spot exchange rate expected in 90 days is U.S.$1.408/euro (= 1/0.71). This value is larger than the current spot rate, $1.400/euro, so investors are expecting the euro to appreciate.

### 案例 4: A forward foreign exchange contract is an agreement to exchange a ...
A forward foreign exchange contract is an agreement to exchange a certain amount of one currency for a certain amount of another currency on some date in the future, with the amounts based on the price (forward exchange rate) set when the contract is entered. A forward foreign exchange contract is a kind of derivative contract based on exchange rates.

## 习题
### 题目 1
Company X is a perfume manufacturer and one of its popular products involves rosewood. It is deeply concerned with the market price fluctuations of rosewood. To protect this, it enters into a contract which would allow the company to buy rosewood at a specific price at a given future date. This is an example of
- A) hedging.
- B) speculation.
- C) investment.
- D) profit maximization.

### 题目 2
The act of taking a net asset position or a net liability position in some asset class is referred to as
- A) hedging.
- B) speculating.
- C) investing.
- D) buying.

### 题目 3
Which of the following is true for forward foreign exchange contracts?
- A) Common dates for future exchange are 50, 100, and 150 days forward.
- B) The actual currency exchange occurs after one week from the stated time period.
- C) They are used mostly to offset net asset positions held in the foreign currencies.
- D) They can be used for both speculation and hedging.

### 题目 4
________ means committing oneself to an uncertain future value of one's net worth in terms of home currency.
- A) Selling
- B) Hedging
- C) Speculating
- D) Importing

### 题目 5
Assume you are a Chinese exporter and expect to receive $250,000 at the end of 60 days. You can remove the risk of loss due to a devaluation of the dollar by
- A) selling dollars in the 60-day forward exchange market.
- B) buying dollars now and selling these dollars at the end of 60 days.
- C) selling the yuan equivalent in the forward exchange market for 60-day delivery.
- D) keeping the dollars in the United States after they are delivered to you.

### 题目 6
Assume you are an American importer who must pay 500,000 Euros at the end of 90 days when you receive 1,000 cases of French wine at your warehouse in New York. Suppose that you have not covered this transaction in the forward market. In which of the following cases will you suffer the largest loss?
- A) The euro spot exchange rate value vis-à-vis the dollar does not change
- B) The euro (spot) initially appreciates by 2 percent, and then depreciates by 1 percent
- C) The euro (spot) initially depreciates by 3 percent, and then appreciates by 2 percent
- D) The euro (spot) initially appreciates by 3 percent, and then depreciates by 2.9 percent

### 题目 7
Assume you are an American importer who must pay 500,000 euros at the end of 60 days when you receive 1,000 cases of French wine at your warehouse in New York. If you do not hedge this transaction, you face exchange-rate risk. The best way to remove the risk of loss due to currency fluctuations is to
- A) buy 500,000 euros in the forward exchange market for delivery in 60 days.
- B) invest the dollar equivalent of 500,000 euros in a dollar-denominated deposit at a French bank.
- C) sell 500,000 euros in the forward exchange market for delivery after 60 days.
- D) sell 500,000 euros now in the spot market.

### 题目 8
An import-export business that finds itself in a "short" foreign-currency position risks a financial loss if
- A) it pays attention to exchange-rate forecasts.
- B) foreign demand for its product rises (more than expected).
- C) the domestic currency depreciates (more than expected).
- D) the foreign currency depreciates (more than expected).

## 参考答案
- 题目 1: 答案：A | 选项内容：hedging. | Topic：Exchange Rate Risk | Difficulty：2 Medium
- 题目 2: 答案：B | 选项内容：speculating. | Topic：Exchange Rate Risk | Difficulty：1 Easy
- 题目 3: 答案：D | 选项内容：They can be used for both speculation and hedging. | Topic：Exchange Rate Risk | Difficulty：1 Easy
- 题目 4: 答案：C | 选项内容：Speculating | Topic：Exchange Rate Risk | Difficulty：1 Easy
- 题目 5: 答案：A | 选项内容：selling dollars in the 60-day forward exchange market. | Topic：Exchange Rate Risk | Difficulty：2 Medium
- 题目 6: 答案：B | 选项内容：The euro (spot) initially appreciates by 2 percent, and then depreciates by 1 percent | Topic：Exchange Rate Risk | Difficulty：2 Medium
- 题目 7: 答案：A | 选项内容：buy 500,000 euros in the forward exchange market for delivery in 60 days. | Topic：Exchange Rate Risk | Difficulty：2 Medium
- 题目 8: 答案：C | 选项内容：the domestic currency depreciates (more than expected). | Topic：Exchange Rate Risk | Difficulty：1 Easy

## AI / NextLab 使用建议
- Mundell Trilemma Lab：将《Forward Exchange and International Financial Investment》对应的理论或政策机制放到贸易分析实验室中做交互式验证。 https://digitconnection.ai/nextlab/