国际财务管理.课后习题-答案~chapter7

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1、-CHAPTER7FUTURESANDOPTIONSONFOREIGNEXCHANGESUGGESTEDANSWERSANDSOLUTIONSTOEND-OF-CHAPTERQUESTIONSANDPROBLEMSQUESTIONS1.Explainthebasicdifferencesbetweentheoperationofacurrencyforwardmarketandafuturesmarket.Answer:TheforwardmarketisanOTCmarketwheretheforwardcontractforpurchaseorsaleofforeigncurrencyi

2、stailor-madebetweentheclientanditsinternationalbank.Nomoneychangeshandsuntilthematuritydateofthecontractwhendeliveryandreceiptaretypicallymade.Afuturescontractisanexchange-tradedinstrumentwithstandardizedfeaturesspecifyingcontractsizeanddeliverydate.Futurescontractsaremarked-to-marketdailytoreflect

3、changesinthesettlementprice.Deliveryisseldommadeinafuturesmarket.Ratherareversingtradeismadetocloseoutalongorshortposition.2.Inorderforaderivativesmarkettofunctionmostefficiently,twotypesofeconomicagentsareneeded:hedgersandspeculators.Explain.Answer:Twotypesofmarketparticipantsarenecessaryfortheeff

4、icientoperationofaderivativesmarket:speculatorsandhedgers.Aspeculatorattemptstoprofitfromachangeinthefuturesprice.Todothis,thespeculatorwilltakealongorshortpositioninafuturescontractdependinguponhisexpectationsoffuturepricemovement.Ahedger,on-the-other-hand,desirestoavoidpricevariationbylockinginap

5、urchasepriceoftheunderlyingassetthroughalongpositioninafuturescontractorasalespricethroughashortposition.Ineffect,thehedgerpassesofftheriskofpricevariationtothespeculatorwhoisbetterable,oratleastmorewilling,tobearthisrisk.3.Whyaremostfuturespositionsclosedoutthroughareversingtraderatherthanheldtode

6、livery?Answer:Inforwardmarkets,approximately90percentofallcontractsthatareinitiallyestablishedresultintheshortmakingdeliverytothelongoftheassetunderlyingthecontract.Thisisnaturalbecausethetermsofforwardcontractsaretailor-madebetweenthelongandshort.Bycontrast,onlyaboutonepercentofcurrencyfuturescont

7、ractsresultindelivery.Whilefuturescontractsareusefulforspeculationandhedging,theirstandardizeddeliverydatesmakethemunlikelytocorrespondtotheactualfuturedateswhenforeignexchange-transactionswilloccur.Thus,th