金融专业英语.pptx

金融专业英语;Chapter 1Functions of Financial Markets;When an investor purchases the securities issued by ultimate borrowers (those who use the funds to invest in real assets), capital market operations for equities, bonds would fall largely into this category. When an investor chooses to invest in the obligations of financial intermediaries, which in turn lend the funds to those who invest in real assets, they are operations in money market for term deposits and loans, interbank transactions of such nature. The primary distinction between the two channels is that, in the first case, i.e. direct financing, the investor is faced directly with the credit risk of the issuer, while in the second case, i.e. financing through financial intermediation, a financial institution, such as a bank, interjects itself between users and providers of funds. Any analysis of the sector of money market dominated by financial intermediaries must be very much concerned with these financial institutions themselves (their policies, financial conditions and official regulatory environment) in addition to those factors governing the suppliers and users of funds. International financial transactions include purchases and sales of foreign currency, securities, gold bullion, and lending and borrowing. ;Foreign exchange marker deals with the exchanges of different means of payment. These exchanges are necessary for international capital flows. As the relative values among different currencies (the exchange rates) will fluctuate according to economic and political circumstances of the currencies of the relative countries, international investors or financiers face exchange risks. To this end, foreign exchange markets provide services, such as forward transactions and foreign currency futures to eliminate such risks. 1.2 Functions Apart from borrowing from banks, a firm or an individual can obtain funds in a financial market in two ways. The most common method is to issue a debt instrument, such as a