Section D
Date: 2015-10-07; view: 439.
D1
Read the letter from John Morley to one of the guests who was at his presentation. The letter contains nine paragraphs.
1. Read it quickly and match the ideas below with the appropriate paragraph number.
A Stating the price of a service.
B Specifying terms and conditions.
C Offering a facility.
D Offering to state the price of a specific service.
E Generally inviting business and offering service.
F Saying who should use a service and when.
G General introduction of a service.
H Explaining how a service works.
I Stating the purpose of writing.
| para. | Wallers Bank plc 14 Churchgate, London ECZA ZYU Telephone: 071 586 2314 Facsimile 071 586 2333 Telex: 338539 Wilhelm Haussmann Corporate Finance Director GVZ AG Quai de Vendome 8007 Zurich Switzerland 18 March 2005 Dear Wilhelm, It was a pleasure to see you at the bank on March 7 and 8. During our Thursday afternoon meeting, we briefly discussed several points and, as promised, we are now writing to you concerning the three major issues raised. Firstly, we noted your interest in learning more about our interest arbitrage operation, a service by means of which we are able to provide very attractive interest rates in all major currencies. The way in which these loans are arranged is by the use of sterling bills of exchange, so-called ‘eligible bills', which can be discounted in the London discount market. This market reflects the short-term (one to six months) domestic interest rate level in the United Kingdom and often provides cheaper funding than LIBOR-related instruments. Companies to whom this form of lending will appeal are, in particular, those that have a borrowing requirement in a currency in which they have receivables available for repayment at the end of the loan period. According to the regulations of the Bank of England, the bills must support a commercial transaction such as export, import or domestic trade. We arrive at our interest rate through discounting sterling bills on behalf of our customer and converting the ned proceeds into the required currency at the spot rate. Wallers then enters into a forward contract with the customer for the purchase of the currency to be repaid at maturity of the loan and all the rates used for these transactions combine to produce the interest rate quoted to the customer. Secondly, you expressed interest in opening a Sterling Current Account and I am now pleased to be able to offer you this facility on the following terms and conditions. For your requirements in Sterling we would operate a current account in your name, transacting all standard banking items and paying interest on any cleared credit balances as follows: – Up to £25,000 – Nil – £25,000 to 100,000 – Wallers Call Rate less 1% p.a. – Over £100,000 – Wallers Call Rate (currently 9% p.a.) I enclose a copy of our standard charges for standard items, but would operate the account free of charge for say six months, except for: - Clearing bank telex charge for same day value payment to one of their branches - Special сlearance costs - Daily telex statement charge After six months, we would review the arrangement in the light of account activity, balances held and prevailing interest rates. We can provide a daily Telex Statement of Account which would be available to you each morning, itemizing all the transactions of the previous day and including the opening and closing balances. Our fee for this service is 600.00 for each account. Finally, you mentioned your forthcoming negotiations for the takeover of a United States company. The exchange risk that arises for you as a contingent liability during the negotiations is clearly a considerable one and one that is best covered, for reasons already discussed, by the use of a currency option. We would be particularly pleased to take this matter further, by advising you as to an appropriate strike price and by quoting a very competitive premium. We thank you for giving us the opportunity to assist you with your banking requirements and look forward to setting up an active and growing relationship with your group of companies. Meanwhile, if you have any queries, please do not hesitate to contact me. With best wishes, Yours sincerely, John Morley Executive Director Foreign Exchange Division What are the three main topics of the letter? |
2. What are the three main topics of the letter?
D2
· Look at these steps describing the bank's interest arbitrage system and number them in the order you think they happen.
· Bills are discounted in the London discount market.
· Bank enters in a forward exchange contract with the customer.
· Bank accepts sterling bills from customer.
· An overall interest rate is calculated on the basis of all the other rates.
· The loan matures and the customer repays the agreed currency amount.
· Net proceeds are exchanged for the currency required at the spot rate.
Now compare your sequence with that in the letter.
D3
· Give the group some time to look through the information dealing with market of currency options. Render it in English and do the task after the text.
В последнее десятилетие заметно усилилось внимание к так называемым производным финансовым инструментам (derivative securities). Термин “производный” связан с тем, что стоимость такого инструмента как бы привязывается к стоимости того или иного базового финансового инструмента (underlying securities) и становится по отношению к нему производной (не в математическом смысле) величиной. Среди производных инструментов наибольший интерес, вероятно, вызывают опционы. В России опционы пока не получили заметного распространения.
Под опционом понимается право, но не обязательство, купить/продать некоторые финансовые инструменты, акции или валюту по оговоренной цене при наступлении срока или до него. За получение этого права покупатель опциона (buyer, holder) при заключении контракта уплачивает продавцу (seller, writer) некоторую премию (premium). Последняя представляет собой рыночную цену опциона. Таким образом, само право в этой операции становится товаром.
Существуют два основных вида опционов: опционы колл и пут. Владелец опциона колл имеет право купить определенный товар (чаще всего, акции) по фиксированной цене (цена исполнения), причем эта возможность сохраняется до определенного дня. Напротив, владелец опциона пут имеет право продать определенный товар по установленной цене (цена исполнения), причем это возможно до фиксированного дня.
Различают еще два вида опционов по срокам их исполнения: европейские и американские. Для европейских опционов фиксирована дата их исполнения. Напротив, американские опционы могут быть исполнены в любой момент до фиксированной даты исполнения. Следует заметить, что приведенные названия не определяют места сделки. Например, американский опцион может быть куплен и в Европе.
Оговоренная в контракте цена объекта опциона называется объявленной, договорной ценой, или ценой исполнения (striking price, exercise price).
Опционы распространяются на акации, динамику их цен (stock index option), различные долговые обязательства, в том числе облигации, казначейские векселя, долговые сертификаты и другие подобного рода бумаги (option on debt instrument), курсы валют (option on currencies exchange rate), процентные ставки (jnterest rates option) и другие объекты. Существует особый класс так называемых экзотических опционов – на право покупки/продажи некоторых видов товаров (металлы, нефть) и даже на право обмена акций одного вида на акции другого вида. Каждый из перечисленных объектов опциона имеет свои особенности, которые должны учитываться в технике выполнения и методе анализа операции.
· Check your comprehension and answer the following questions:
1. Has currency options business been popular among traders for many years?
2. What is option?
3. Comment on two major kinds of options.
4. Is there any difference in exercising European or American options?
5. Can option trading offer a wide and diverse range of potentially attractive opportunities? Prove your answer.
D4
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