unit 17: financial derivatives financial english

Unit 17:Unit 17:

Financial Financial DerivativesDerivatives

Financial EnglishFinancial English

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Unit 17:Unit 17:

• Revision of Unit 16

• Background information of Unit 17

• Useful points of this unit

• Text

• ExercisesExercises

• AssignmentAssignment

Review of Unit 16Review of Unit 16

• Dictation

• Blanks filling Blanks filling

Revision of Unit 16Revision of Unit 16

DictationDictation

Dictation!Dictation!

You are going to hear 5 sentences. Each You are going to hear 5 sentences. Each

willwill

be read three times. Write down the sentences be read three times. Write down the sentences

according to what you hear.according to what you hear.

1.1. 2.2. 3.3. 4.4. 5.5.

Check-upCheck-upCheck-upCheck-up

Key to Dictation:Key to Dictation:1.1. An insurance intermediary is an individual or firm that An insurance intermediary is an individual or firm that

provides advice on insurance and can arrange policies.provides advice on insurance and can arrange policies.2.2. It is noticed that most of the contingent commissions are It is noticed that most of the contingent commissions are

passed on to policyholders in the premium.passed on to policyholders in the premium.3.3. In most insurance transactions, there is an intermediary, In most insurance transactions, there is an intermediary,

usually an insurance agent or broker, between the buyer and usually an insurance agent or broker, between the buyer and the insurer.the insurer.

4.4. Insurance intermediaries will go through the competitive Insurance intermediaries will go through the competitive market in search of the best placement for their client.market in search of the best placement for their client.

5.5. In recent years, lots of new operation modes emerged in In recent years, lots of new operation modes emerged in insurance intermediary market, and innovation becomes an insurance intermediary market, and innovation becomes an internal impetus.internal impetus.

DictationDictation

Fill in the blanks with proper words or phrases given below

Blanks fillingBlanks filling

questionquestion compensationcompensation claimclaim inspectinspect causecause

difficultdifficult settlementsettlement noticenotice damagedamage invoiceinvoice

questionquestion compensationcompensation claimclaim inspectinspect causecause

difficultdifficult settlementsettlement noticenotice damagedamage invoiceinvoice

Mr. Cooper (C) is asking Ms. Wen (W) about the claim for insuranceMr. Cooper (C) is asking Ms. Wen (W) about the claim for insurance

C: One more thing I would like to know is how you deal with _________ for cargo insurance.

W: Most of the insurance companies have the policy that immediate __________should be given to the nearest branch or agency in the event of damage ___________ a claim under a policy on goods.

CC: Then who will be responsible for next step?: Then who will be responsible for next step?

WW: The insurance company will appoint a surveyor to : The insurance company will appoint a surveyor to __________ goods and report the nature and extent of the __________ goods and report the nature and extent of the ____________. Usually a kind of certificate of loss will be ____________. Usually a kind of certificate of loss will be issued to the consignee who is held responsible for the issued to the consignee who is held responsible for the expense.expense.

CC: Of course, the claims procedure will vary by : Of course, the claims procedure will vary by circumstances.circumstances.

WW: True. But undoubtedly a quicker ___________should be : True. But undoubtedly a quicker ___________should be secured in case of losses or damages.secured in case of losses or damages.

CC: Would you please tell me what documents are usually : Would you please tell me what documents are usually required when making an insurance claim?required when making an insurance claim?


WW: Generally the commercial __________issued to the buyer, the original : Generally the commercial __________issued to the buyer, the original bill of lading, the original policy or certificate of insurance, the survey bill of lading, the original policy or certificate of insurance, the survey report evidencing the loss or damage, exchange of correspondence report evidencing the loss or damage, exchange of correspondence regarding their liability for the loss and also landing situation of the goods regarding their liability for the loss and also landing situation of the goods at final destination.at final destination.

CC: It’s too complicated, I think.: It’s too complicated, I think.

W: What we just mentioned is just a theoretical procedure of an insurance W: What we just mentioned is just a theoretical procedure of an insurance claim, in fact when we deal with specific cases, things usually are much claim, in fact when we deal with specific cases, things usually are much more ____________ than you can imagine. Anyway, we aim at providing more ____________ than you can imagine. Anyway, we aim at providing _________________ for the loss suffered by the insured._________________ for the loss suffered by the insured.

CC: I get to understand the importance of taking out correct and adequate : I get to understand the importance of taking out correct and adequate types of insurance, otherwise our legal rights to the goods will face the types of insurance, otherwise our legal rights to the goods will face the danger of suffering from losses or damages.danger of suffering from losses or damages.

WW: For our insurance company, three fundamental principles must be : For our insurance company, three fundamental principles must be abided by.abided by.


CC: What are they?: What are they?

WW: The insurable interest, good faith, and indemnity.: The insurable interest, good faith, and indemnity.

CC: I’d like to ask you for more information concerning all : I’d like to ask you for more information concerning all these aspects we’ve discussed today.these aspects we’ve discussed today.

WW: Okay, if you have any ____________ during your reading, : Okay, if you have any ____________ during your reading, feel free to contact me.feel free to contact me.

CC: Thank you again for your kindness.: Thank you again for your kindness.

WW: May we have more chances to work together.: May we have more chances to work together.

CC: Bye!: Bye!

WW: Bye!: Bye!



Mr. Cooper (C) is asking Ms. Wen (W) about the claim for insuranceMr. Cooper (C) is asking Ms. Wen (W) about the claim for insurance

CC: One more thing I would like to know is how you deal with : One more thing I would like to know is how you deal with claimsclaims for cargo insurance. for cargo insurance.

WW: Most of the insurance companies have the policy that : Most of the insurance companies have the policy that immediate immediate noticenotice should be given to the nearest branch or should be given to the nearest branch or agency in the event of damage agency in the event of damage causingcausing a claim under a policy a claim under a policy on goods.on goods.

CC: Then who will be responsible for next step?: Then who will be responsible for next step?

WW: The insurance company will appoint a surveyor to : The insurance company will appoint a surveyor to inspectinspect goods and report the nature and extent of the goods and report the nature and extent of the damagedamage. . Usually a kind of certificate of loss will be issued to the Usually a kind of certificate of loss will be issued to the consignee who is held responsible for the expense.consignee who is held responsible for the expense.

Check-upCheck-up

Check-upCheck-up

CC: Of course, the claims procedure will vary by : Of course, the claims procedure will vary by circumstances.circumstances.

WW: True. But undoubtedly a quicker : True. But undoubtedly a quicker settlementsettlement should be should be secured in case of losses or damages.secured in case of losses or damages.

CC: Would you please tell me what documents are usually : Would you please tell me what documents are usually required when making an insurance claim?required when making an insurance claim?

WW: Generally the commercial : Generally the commercial invoiceinvoice issued to the buyer, the issued to the buyer, the original bill of lading, the original policy or certificate of original bill of lading, the original policy or certificate of insurance, the survey report evidencing the loss or damage, insurance, the survey report evidencing the loss or damage, exchange of correspondence regarding their liability for the exchange of correspondence regarding their liability for the loss and also landing situation of the goods at final loss and also landing situation of the goods at final destination.destination.

CC: It’s too complicated, I think.: It’s too complicated, I think.

Check-upCheck-up

WW: What we just mentioned is just a theoretical procedure of an : What we just mentioned is just a theoretical procedure of an insurance claim, in fact when we deal with specific cases, insurance claim, in fact when we deal with specific cases, things usually are much more things usually are much more difficultdifficult than you can imagine. than you can imagine. Anyway, we aim at providing Anyway, we aim at providing compensationcompensation for the loss for the loss suffered by the insured.suffered by the insured.

CC: I get to understand the importance of taking out correct and : I get to understand the importance of taking out correct and adequate types of insurance, otherwise our legal rights to the adequate types of insurance, otherwise our legal rights to the goods will face the danger of suffering from losses or damages.goods will face the danger of suffering from losses or damages.

WW: For our insurance company, three fundamental principles : For our insurance company, three fundamental principles must be abided by.must be abided by.

CC: What are they?: What are they?

Check-upCheck-up

WW: The insurable interest, good faith, and indemnity.: The insurable interest, good faith, and indemnity.

CC: I’d like to ask you for more information concerning all : I’d like to ask you for more information concerning all these aspects we’ve discussed today.these aspects we’ve discussed today.

WW: Okay, if you have any : Okay, if you have any question question during your reading, during your reading, feel free to contact me.feel free to contact me.

CC: Thank you again for your kindness.: Thank you again for your kindness.

WW: May we have more chances to work together.: May we have more chances to work together.

CC: Bye!: Bye!

WW: Bye!: Bye!

Text : Background InformationText : Background Information

本章旨在介绍金融衍生品的定义，使学生明

确金融衍生品的概念，了解常见金融衍生品的

种类，知道金融衍生品的套期保值和投机功能，

了解金融衍生品交易的风险和收益。

本章旨在介绍金融衍生品的定义，使学生明

确金融衍生品的概念，了解常见金融衍生品的

种类，知道金融衍生品的套期保值和投机功能，

了解金融衍生品交易的风险和收益。

Text : Useful points of this unitText : Useful points of this unit

本章重点 :

通过本章学习，学生应该掌握

1 、金融衍生品的种类

2 、金融衍生品的功能

3 、金融衍生品的风险和收益

本章重点 :

通过本章学习，学生应该掌握

1 、金融衍生品的种类

2 、金融衍生品的功能

3 、金融衍生品的风险和收益

Unit 17:Unit 17:

17.1 Introduction to Financial Derivatives

17.2 Types of Financial Derivatives

ETDETD

OTCOTC

17.3 Functions of Financial Derivatives

HEDGINGHEDGING

SPECULATIONSPECULATION

17.4 Risks and Benefits

ListeningListening

TextText

17.1 Introduction to Financial 17.1 Introduction to Financial

DerivativesDerivatives

17.1 Introduction to Financial 17.1 Introduction to Financial


Listen carefully to the first part of the text and then Listen carefully to the first part of the text and then try to understand it. try to understand it.

Financial Financial derivatives are financial contracts, or are financial contracts, or financial instruments, whose values are financial instruments, whose values are derived from the the value of something else (known as the underlying). The value of something else (known as the underlying). The underlying on which a derivative is based can be an asset on which a derivative is based can be an asset (e.g., commodities, (e.g., commodities, equities (stocks), (stocks), residential mortgages, , commercial commercial real estate, loans, bonds), an , loans, bonds), an index (e.g., interest (e.g., interest rates, exchange rates, stock market indices, consumer price rates, exchange rates, stock market indices, consumer price index (CPI)), or other items (e.g., weather conditions, or index (CPI)), or other items (e.g., weather conditions, or other derivatives). Credit derivatives are based on loans, other derivatives). Credit derivatives are based on loans, bonds or other forms of credit.bonds or other forms of credit.

Text :Text :

The main kinds of derivatives are: forwards The main kinds of derivatives are: forwards

(which if traded on an exchange are known as (which if traded on an exchange are known as

futures); options; and swaps.futures); options; and swaps.

Because the value of a derivative Because the value of a derivative

is contingent on the value of the underlying, the the value of the underlying, the

notional value of derivatives is recorded off the of derivatives is recorded off the

balance sheet of an institution, although the market of an institution, although the market

value of derivatives is recorded on the balance sheet.value of derivatives is recorded on the balance sheet.

Text :Text :

End of part 1End of part 1

derivativederivative n. a financial instrument whose value is n. a financial instrument whose value is based on another security. based on another security. 衍生品衍生品

Text : Language PointsText : Language Points

derive fromderive from … …从获得… …从获得 , , … 来自，起源… 来自，起源

…于…于underlyingunderlying adj. fundamental, being or involving basic adj. fundamental, being or involving basic facts or principles facts or principles 基本的，根本的基本的，根本的

It's the essential nature or underlying reality.It's the essential nature or underlying reality.

这就是真实的重要本性。这就是真实的重要本性。

The underlying principle behind Intranet theory is "information The underlying principle behind Intranet theory is "information democracy".democracy".

内部网理论背后的基本原理是“信息民主”。内部网理论背后的基本原理是“信息民主”。equityequity n. the ownership interest of shareholders in a n. the ownership interest of shareholders in a corporation corporation 股本，股票股本，股票

residential mortgageresidential mortgage 住宅按揭，住宅抵押住宅按揭，住宅抵押

mortgage mortgage n. / vt.n. / vt. 抵押抵押repay one's mortgage in monthly instalment repay one's mortgage in monthly instalment

每月分期付款偿还抵押借款每月分期付款偿还抵押借款


real estatereal estate property in the form of land and property in the form of land and buildings, rather than personal possessions. buildings, rather than personal possessions. 不动产不动产

indexindex n. a number or ratio (a value on a scale of n. a number or ratio (a value on a scale of measurement) derived from a series of observed facts; measurement) derived from a series of observed facts; can reveal relative changes as a function of time can reveal relative changes as a function of time 指数指数(pl. indexes or indices)(pl. indexes or indices)

be contingent onbe contingent on determined by conditions or determined by conditions or circumstances not yet established circumstances not yet established 视情况条件而定的视情况条件而定的

Our arrival time is contingent on the weather.Our arrival time is contingent on the weather.

我们的抵达时间取决于天气情况。我们的抵达时间取决于天气情况。


notional valuenotional value the face value of the underlying the face value of the underlying instruments on which derivatives are traded. instruments on which derivatives are traded. 名义价名义价

值，名目金额值，名目金额balance sheetbalance sheet n. a record of the financial situation n. a record of the financial situation of an institution on a particular date by listing its assets of an institution on a particular date by listing its assets and the claims against those assets and the claims against those assets 资产负债表，决算资产负债表，决算

表，平衡表表，平衡表

ListeningListening

TextText

17.2 17.2 Types of Financial Types of Financial


17.2 17.2 Types of Financial Types of Financial


Listen carefully to the second part of the text and Listen carefully to the second part of the text and then try to understand it. then try to understand it.

Broadly speaking there are two distinct groups of Broadly speaking there are two distinct groups of

derivative contracts, which are distinguished by the derivative contracts, which are distinguished by the

way they are traded in market.way they are traded in market.

Exchange-traded derivatives (ETD)

Over-the-counter (OTC)

Text :Text :

Exchange-traded derivatives (ETD)Exchange-traded derivatives (ETD) are are those derivatives products that are traded those derivatives products that are traded via specialized derivatives exchanges or other specialized derivatives exchanges or other exchanges. A derivatives exchange acts as an exchanges. A derivatives exchange acts as an intermediary to all related transactions, and intermediary to all related transactions, and takes initial takes initial margin from both sides of the trade from both sides of the trade to act as a guarantee. The world's largest to act as a guarantee. The world's largest derivatives exchanges (by number of derivatives exchanges (by number of transactions) are the transactions) are the Korea Exchange (which lists (which lists KOSPI Index Futures & Options), KOSPI Index Futures & Options),

Text :Text :

Eurex (which lists a wide range of European (which lists a wide range of European products such as interest rate & index products), products such as interest rate & index products), and and CME Group (made up of the 2007 merger of (made up of the 2007 merger of the Chicago Mercantile Exchange and the the Chicago Mercantile Exchange and the Chicago Board of Trade and the 2008 acquisition Chicago Board of Trade and the 2008 acquisition of the New York Mercantile Exchange). of the New York Mercantile Exchange). According to According to the Bank for International Settlements, the combined , the combined turnover in the world's derivatives in the world's derivatives exchanges totaled US$ 344 trillion during the exchanges totaled US$ 344 trillion during the fourth quarter of 2005.fourth quarter of 2005.

Text :Text :

Over-the-counter (OTC)Over-the-counter (OTC) derivatives are derivatives are contracts that are traded (and privately contracts that are traded (and privately negotiated) directly between two parties, negotiated) directly between two parties, without going through an exchange or other without going through an exchange or other intermediary. Products such as swaps, forward intermediary. Products such as swaps, forward rate agreements, and rate agreements, and exotic options are almost are almost always traded in this way. The OTC derivative always traded in this way. The OTC derivative market is the largest market for derivatives, market is the largest market for derivatives, and is unregulated. OTC derivatives are largely and is unregulated. OTC derivatives are largely subject to counterparty risk, as the validity of a subject to counterparty risk, as the validity of a contract depends on the counterparty's contract depends on the counterparty's solvency and ability to honor its obligations. and ability to honor its obligations.

Text :Text :


viavia prep. by making use of that means or person or prep. by making use of that means or person or through a place on the way to your destinationthrough a place on the way to your destination 经由，经由，经过，通过经过，通过

to travel from Beijing to Shanghai via Tianjinto travel from Beijing to Shanghai via Tianjin

由北京经由天津去上海由北京经由天津去上海

I sent a message to Mary via her brother.I sent a message to Mary via her brother.

我托玛丽的兄弟把信带给她。我托玛丽的兄弟把信带给她。


marginmargin n. the amount of collateral a customer n. the amount of collateral a customer deposits with a broker when borrowing from the deposits with a broker when borrowing from the broker to buy securities broker to buy securities 保证金保证金

Korea ExchangeKorea Exchange 韩国证券交易所韩国证券交易所


EurexEurex 欧洲期权与期货交易所欧洲期权与期货交易所

CME GroupCME Group 美国芝加哥交易所集团美国芝加哥交易所集团

the Bank for International Settlementsthe Bank for International Settlements 国际清算银行国际清算银行

turnoverturnover n. n. 销售量销售量 , , 营业额营业额

Our remuneration increase with the turnover.Our remuneration increase with the turnover.

我们的报酬随营业额的增加而增加。我们的报酬随营业额的增加而增加。

Turnover tax = business tax Turnover tax = business tax

营业税营业税

exotic optionexotic option a type of option with a more a type of option with a more complicated pay-out structure than a plain vanilla complicated pay-out structure than a plain vanilla put or call option.put or call option. 第二代期权组合第二代期权组合

exoticexotic adj. adj. 异国的异国的

Their taste runs to exotic food.Their taste runs to exotic food.

他们喜欢吃外国风味的食品。他们喜欢吃外国风味的食品。


solvencysolvency n. the ability to meet maturing obligations n. the ability to meet maturing obligations as they come due as they come due 偿付能力偿付能力We should be much obliged if you would give us your opinion of We should be much obliged if you would give us your opinion of their solvency and trustworthiness. their solvency and trustworthiness.

贵方对该公司的付款能力与信用状况持何看法，恳请告知，则贵方对该公司的付款能力与信用状况持何看法，恳请告知，则感厚谊。感厚谊。

ListeningListening

TextText



Listen carefully to the third part of the text and Listen carefully to the third part of the text and then try to translate some sentences. then try to translate some sentences.

Derivatives can be used to Derivatives can be used to mitigate the risk the risk of economic loss arising from changes in the value of economic loss arising from changes in the value of the underlying. This activity is known as of the underlying. This activity is known as hedging. Alternatively, derivatives can be used by investors . Alternatively, derivatives can be used by investors to increase the profit arising if the value of the to increase the profit arising if the value of the underlying moves in the direction they expect. This underlying moves in the direction they expect. This activity is known as activity is known as speculation..

HEDGING

SPECULATION

Text :Text :

Sentence TranslationSentence TranslationSentence TranslationSentence Translation

HEDGINGHEDGING

Derivatives allow risk about the value of the underlying asset to be transferred from one party to another. For example, a wheat farmer and a miller could sign a futures contract to exchange a specified amount of cash for a specified amount of wheat in the future. Both parties have reduced a future risk: for the wheat farmer, the uncertainty of the price, and for the miller, the availability of wheat. However, there is still the risk that no wheat will be available due to causes unspecified by the contract, like the weather, or that one party will renege on the contract. (Although a third party, called a clearing house, insures a futures contract, not all derivatives are insured against counterparty risk.)

Text :Text :

From another perspective, the farmer and the miller both reduce a risk and acquire a risk when they sign the futures contract: The farmer reduces the risk that the price of wheat will fall below the price specified in the contract and acquires the risk that the price of wheat will rise above the price specified in the contract (thereby losing additional income that he could have earned). The miller, on the other hand, acquires the risk that the price of wheat will fall below the price specified in the contract (thereby paying more in the future than he otherwise would) and reduces the risk that the price of wheat will rise above the price specified in the contract. In this sense, one party is the insurer (risk taker) for one type of risk, and the counterparty is the insurer (risk taker) for another type of risk.

Text :Text :

Hedging also occurs when an individual or institution buys an asset (like a commodity, a bond that has coupon payments, a stock that pays dividends, and so on) and sells it using a futures contract. The individual or institution has access to the asset for a specified amount of time, and then can sell it in the future at a specified price according to the futures contract. Of course, this allows the individual or institution the benefit of holding the asset while reducing the risk that the future selling price will deviate unexpectedly from the market's current assessment of the future value of the asset.

Text :Text :


SPECULATIONSPECULATION

Derivatives can be used to acquire risk, rather than to insure or hedge against risk. Thus, some individuals and institutions will enter into a derivative contract to speculate on the value of the underlying asset, betting that the party seeking insurance will be wrong about the future value of the underlying asset. Speculators will want to be able to buy an asset in the future at a low price according to a derivative contract when the future market price is high, or to sell an asset in the future at a high price according to a derivative contract when the future market price is low.

Text :Text :

Individuals and institutions may also look for arbitrage opportunities, as when the current buying price of an asset falls below the price specified in a futures contract to sell the asset.

Speculative trading in derivatives gained a great deal of notoriety in 1995 when Nick Leeson, a trader at Barings Bank, made poor and unauthorized investments in futures contracts. Through a combination of poor judgment, lack of oversight by the bank's management and by regulators, and unfortunate events like the Kobe earthquake, Leeson incurred a $1.3 billion loss that bankrupted the centuries-old institution.

Text :Text :


Text : Text : Key toKey to TranslationTranslation

金融衍生品可以减少因待交易金融产品价格波动而造成的经济损失，这就是所谓的保值。另外，如果价格变动预期正确，金融衍生品也可以为投资者带来利益，这就是所谓的投机。

金融衍生品可以减少因待交易金融产品价格波动而造成的经济损失，这就是所谓的保值。另外，如果价格变动预期正确，金融衍生品也可以为投资者带来利益，这就是所谓的投机。


不论是个人还是企业购买了资产（比如某种商品、债券、股票等），并打算以期货形式卖出时，就会形成所谓的套期保值。按照期货合约的规定，资产所有人不论是个人还是企业都可以先获取资产然后在未来某一确定的时间以商定的价格将该资产卖出。

不论是个人还是企业购买了资产（比如某种商品、债券、股票等），并打算以期货形式卖出时，就会形成所谓的套期保值。按照期货合约的规定，资产所有人不论是个人还是企业都可以先获取资产然后在未来某一确定的时间以商定的价格将该资产卖出。

mitigate vt. to make it less unpleasant, serious, or painful. 使缓和，减轻

Nothing could mitigate the cruelty with which she had treated him.

她对他太残暴了，实在是罪无可恕。to mitigate the sufferings of the dying woman

尽可能减轻这垂死妇人的痛苦


hedging n. any technique designed to reduce or eliminate financial risk; for example, taking two positions that will offset each other if prices change

套期保值，对冲交易

speculation n. an investment that is very risky but could yield great profits 投机

hedging n. any technique designed to reduce or eliminate financial risk; for example, taking two positions that will offset each other if prices change

套期保值，对冲交易

speculation n. an investment that is very risky but could yield great profits 投机

counter-party risk the risk that the opposite party to a contract defaults on its obligations 交易对手风险counter n. 相反的事；反对物 ; 反方向地（的）；counter-envelopment on double flanks

反合围Inform against a counter-revolutionary

检举一个反革命分子He acted counter to his promise.

他的行动与他的诺言相反。


deviate vi. to differ or diverge or cause to differ or diverge, as in belief or thought;to turn aside or cause to turn aside;

越 ( 轨 ), 脱离 ( 常轨 ); 违背 ; 偏斜 , 离题

His remarks usually deviate from truth.

他的话通常都与事实不符。

Don’t deviate from the principle.

不要违背原则。

I will never deviate from what I believe to be right.

我绝不背离我自信正确的道路。


speculate vi. to buy or sell securities, property, etc, in the hope of deriving capital gains 投机 ( in/on); to conjecture without knowing the complete facts 沉思 , 思索 , 揣想 , 设想 , 推测 ( about, on, upon)speculate about the origin of the universe 推测宇宙的起源

speculate in stocks 做股票投机

speculate on a rise [fall] 做多头 [ 空头 ] 投机 , 赌涨[ 跌 ]

I've been -ting on my future.

我一直在思索我的未来。

How to Speculate with Stock Index Futures

如何以股价指数期货投机


arbitrage n. a kind of hedged investment meant to capture slight differences in price； the activity of buying shares or currency in one financial market and selling it at a profit in another. 套利


Barings Bank 巴林银行是英国历史最悠久的银行之一，于 1995年 2月 26 日倒闭，其原因是一位名为尼克•李森（ Nick Leeson ）的交易员在衍生性金融商品的超额交易，投机失败，导致损失 14 亿美元。

ListeningListening

TextText

17.4 Benefits and Risks17.4 Benefits and Risks17.4 Benefits and Risks17.4 Benefits and Risks

Listen carefully to the fourth part of the text and Listen carefully to the fourth part of the text and then try to translate some sentences. then try to translate some sentences.

RISKSRISKS

Derivatives are often subject to the following criticisms:Derivatives are often subject to the following criticisms:

Possible large losses

Derivatives (especially swaps) expose investors to counter-party risk

Unsuitably high risk for small or inexperienced investors

Large notional value

Leverage of an economy's debt

BENEFITS

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Possible large lossesPossible large losses

The use of derivatives can result in large losses due to the The use of derivatives can result in large losses due to the use of leverage, or borrowing. Derivatives allow investors to use of leverage, or borrowing. Derivatives allow investors to earn large returns from small movements in the underlying earn large returns from small movements in the underlying asset's price. However, investors could lose large amounts if the asset's price. However, investors could lose large amounts if the price of the underlying moves against them significantly.price of the underlying moves against them significantly. There There have been several instances of massive losses in derivative have been several instances of massive losses in derivative markets, such as the need to markets, such as the need to recapitalize insurer American insurer American International Group (International Group (AIG) with $85 billion of debt provided ) with $85 billion of debt provided by the US federal government. An AIG by the US federal government. An AIG subsidiary had lost had lost more than $18 billion over the more than $18 billion over the preceding three quarters on three quarters on Credit Default Swaps (Credit Default Swaps (CDS) it had written. It was reported ) it had written. It was reported that the recapitalization was necessary because further losses that the recapitalization was necessary because further losses were foreseeable over the next few quarters.were foreseeable over the next few quarters.

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Derivatives (especially swaps) expose investors to Derivatives (especially swaps) expose investors to counter-party riskcounter-party risk

For example, suppose a person wanting a fixed For example, suppose a person wanting a fixed interest rate loan for his business, but finding that banks interest rate loan for his business, but finding that banks only offer variable rates, swaps payments with another only offer variable rates, swaps payments with another business who wants a variable rate, business who wants a variable rate, synthetically creating a creating a fixed rate for the person. However if the second business fixed rate for the person. However if the second business goes bankrupt, it can't pay its variable rate and so the first goes bankrupt, it can't pay its variable rate and so the first business will lose its fixed rate and will be paying a variable business will lose its fixed rate and will be paying a variable rate again. If interest rates have increased, it is possible that rate again. If interest rates have increased, it is possible that the first business may be the first business may be adversely affected, because it may affected, because it may not be prepared to pay the higher variable rate.not be prepared to pay the higher variable rate.

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Different types of derivatives have different levels of Different types of derivatives have different levels of risk for this effect. For example, standardized stock risk for this effect. For example, standardized stock options by law require the party at risk to have a options by law require the party at risk to have a certain amount deposited with the exchange, showing certain amount deposited with the exchange, showing that they can pay for any losses; Banks who help that they can pay for any losses; Banks who help businesses swap variable for fixed rates on loans may businesses swap variable for fixed rates on loans may do credit checks on both parties. However in private do credit checks on both parties. However in private agreements between two companies, for example, there agreements between two companies, for example, there may not be may not be benchmarks for performing for performing due diligence and and risk analysis.risk analysis.

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Unsuitably high risk for small or Unsuitably high risk for small or inexperienced investorsinexperienced investors

Derivatives pose unsuitably high amounts of risk Derivatives pose unsuitably high amounts of risk for small or inexperienced investors. Because derivatives for small or inexperienced investors. Because derivatives offer the possibility of large rewards, they offer an offer the possibility of large rewards, they offer an attraction even to individual investors. However, attraction even to individual investors. However, speculation in derivatives often speculation in derivatives often assumes a great deal of a great deal of risk, requiring risk, requiring commensurate experience and market experience and market knowledge, especially for the small investor, a reason why knowledge, especially for the small investor, a reason why some financial planners advise against the use of these some financial planners advise against the use of these instruments. Derivatives are complex instruments devised instruments. Derivatives are complex instruments devised as a form of insurance, to transfer risk among parties as a form of insurance, to transfer risk among parties based on their willingness to assume additional risk, or based on their willingness to assume additional risk, or hedge against it.hedge against it.

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Large notional valueLarge notional valueDerivatives typically have a large notional Derivatives typically have a large notional

value. As such, there is the danger that their use could value. As such, there is the danger that their use could result in losses that the investor would be unable to result in losses that the investor would be unable to compensate for. The possibility that this could lead to a compensate for. The possibility that this could lead to a chain reaction ensuing in an economic crisis, has been chain reaction ensuing in an economic crisis, has been pointed out by legendary investor pointed out by legendary investor Warren Buffett in in Berkshire Hathaway's annual report. Buffett called Berkshire Hathaway's annual report. Buffett called them 'financial weapons of mass destruction.' The them 'financial weapons of mass destruction.' The problem with derivatives is that they control an problem with derivatives is that they control an increasingly larger notional amount of assets and this increasingly larger notional amount of assets and this may lead to may lead to distortions in the real capital and equities in the real capital and equities markets. Investors begin to look at the derivatives markets. Investors begin to look at the derivatives markets to make a decision to buy or sell securities and markets to make a decision to buy or sell securities and so what was originally meant to be a market to transfer so what was originally meant to be a market to transfer risk now becomes a leading indicator.risk now becomes a leading indicator.

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Leverage of an economy's debtLeverage of an economy's debt

Derivatives massively leverage the debt in an economy, Derivatives massively leverage the debt in an economy, making it ever more difficult for the underlying real making it ever more difficult for the underlying real economy to service its debt obligations and economy to service its debt obligations and curtailing real real economic activity, which can cause a recession or even economic activity, which can cause a recession or even depression. In the view of Marriner S. Eccles, depression. In the view of Marriner S. Eccles, U.S. Federal Reserve Chairman from November, 1934 to Chairman from November, 1934 to February, 1948, too high a level of debt was one of the February, 1948, too high a level of debt was one of the primary causes of the 1920s-30s Great Depression.primary causes of the 1920s-30s Great Depression.

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BENEFITSBENEFITS

Nevertheless, the use of derivatives also has its benefits:Nevertheless, the use of derivatives also has its benefits:

Derivatives Derivatives facilitate the buying and selling of risk, and the buying and selling of risk, and thus have a positive impact on the economic system. thus have a positive impact on the economic system. Although someone loses money while someone else gains Although someone loses money while someone else gains money with a derivative, under normal circumstances, money with a derivative, under normal circumstances, trading in derivatives should not adversely affect the trading in derivatives should not adversely affect the economic system because it is not zero sum in utility. economic system because it is not zero sum in utility.

Former Federal Reserve Board chairman Former Federal Reserve Board chairman Alan Greenspan commented in 2003 that he believed that commented in 2003 that he believed that the use of derivatives has softened the impact of the the use of derivatives has softened the impact of the economic downturn at the beginning of the 21st century.economic downturn at the beginning of the 21st century.

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由于杠杆作用，或者叫借钱交易，因为金融衍生品允许投资者通过标的资产价格的细微变动获得丰厚回报，相应的金融衍生品也就可能导致巨额损失。也就是说当标的资产价格的变动方向与投资者预期反向变化时，投资者会赔钱。

由于杠杆作用，或者叫借钱交易，因为金融衍生品允许投资者通过标的资产价格的细微变动获得丰厚回报，相应的金融衍生品也就可能导致巨额损失。也就是说当标的资产价格的变动方向与投资者预期反向变化时，投资者会赔钱。


金融衍生品交易推动了风险买卖，促进了经济发展。尽管有人赚钱有人赔钱，在正常情况下，由于并非零和效益，金融衍生品的交易不会阻碍经济发展的步伐。

金融衍生品交易推动了风险买卖，促进了经济发展。尽管有人赚钱有人赔钱，在正常情况下，由于并非零和效益，金融衍生品的交易不会阻碍经济发展的步伐。

recapitalizerecapitalize vt. vt. 再投资再投资 ; ; 改变改变 [ [ 调整调整 ]... ]... 的资本的资本

结构结构


AIGAIG 美国国际集团。美国国际集团是世界保险和美国国际集团。美国国际集团是世界保险和金融服务的领导者，也是全球首屈一指的国际性保金融服务的领导者，也是全球首屈一指的国际性保险服务机构，业务遍及全球一百三十多个国家及地险服务机构，业务遍及全球一百三十多个国家及地区，其成员公司通过世界保险业最为庞大的财产保区，其成员公司通过世界保险业最为庞大的财产保险及人寿保险服务网络，竭诚为各商业、机构和个险及人寿保险服务网络，竭诚为各商业、机构和个人客户提供服务。当人客户提供服务。当 20082008 年美国房地产市场日益年美国房地产市场日益变糟时，变糟时， AIGAIG 仍深信信用违约互换（仍深信信用违约互换（ CDSCDS ）资产）资产组合将能挺过风暴。此后，组合将能挺过风暴。此后， AIGAIG 遭到了来自监管机遭到了来自监管机构的压力。构的压力。 AIGAIG 的债券被调降。的债券被调降。 20082008 年９月年９月 1616 日日联邦储备银行向陷于破产边缘的美国国际集团ＡＩ联邦储备银行向陷于破产边缘的美国国际集团ＡＩＧ提供Ｇ提供 850850 亿美元紧急贷款，贷款将以ＡＩＧ的全亿美元紧急贷款，贷款将以ＡＩＧ的全部资产为抵押，美国政府将持有该集团近部资产为抵押，美国政府将持有该集团近 8080 ％股％股份。份。

AIGAIG 美国国际集团。美国国际集团是世界保险和美国国际集团。美国国际集团是世界保险和金融服务的领导者，也是全球首屈一指的国际性保金融服务的领导者，也是全球首屈一指的国际性保险服务机构，业务遍及全球一百三十多个国家及地险服务机构，业务遍及全球一百三十多个国家及地区，其成员公司通过世界保险业最为庞大的财产保区，其成员公司通过世界保险业最为庞大的财产保险及人寿保险服务网络，竭诚为各商业、机构和个险及人寿保险服务网络，竭诚为各商业、机构和个人客户提供服务。当人客户提供服务。当 20082008 年美国房地产市场日益年美国房地产市场日益变糟时，变糟时， AIGAIG 仍深信信用违约互换（仍深信信用违约互换（ CDSCDS ）资产）资产组合将能挺过风暴。此后，组合将能挺过风暴。此后， AIGAIG 遭到了来自监管机遭到了来自监管机构的压力。构的压力。 AIGAIG 的债券被调降。的债券被调降。 20082008 年９月年９月 1616 日日联邦储备银行向陷于破产边缘的美国国际集团ＡＩ联邦储备银行向陷于破产边缘的美国国际集团ＡＩＧ提供Ｇ提供 850850 亿美元紧急贷款，贷款将以ＡＩＧ的全亿美元紧急贷款，贷款将以ＡＩＧ的全部资产为抵押，美国政府将持有该集团近部资产为抵押，美国政府将持有该集团近 8080 ％股％股份。份。

subsidiarysubsidiary n. short for subsidiary company n. short for subsidiary company 子公司子公司

母公司母公司 parent companyparent companyUh guano company will set up a sale subsidiary in Uh guano company will set up a sale subsidiary in singapore. singapore. 华光公司将在新加坡建立一个子公司。华光公司将在新加坡建立一个子公司。


precedingpreceding adj.going or coming before; former adj.going or coming before; former 在前的在前的 , , 前面的前面的

Each generation surpasses the preceding one.Each generation surpasses the preceding one. 一代更比一代强。一代更比一代强。

precedingpreceding adj.going or coming before; former adj.going or coming before; former 在前的在前的 , , 前面的前面的

Each generation surpasses the preceding one.Each generation surpasses the preceding one. 一代更比一代强。一代更比一代强。

CDSCDS 信贷违约掉期信贷违约掉期 : : 一种转移交易方定息产品信一种转移交易方定息产品信贷风险的掉期安排。就是给金融衍生品的信用作担贷风险的掉期安排。就是给金融衍生品的信用作担

保保

CDSCDS 信贷违约掉期信贷违约掉期 : : 一种转移交易方定息产品信一种转移交易方定息产品信贷风险的掉期安排。就是给金融衍生品的信用作担贷风险的掉期安排。就是给金融衍生品的信用作担

保保

syntheticallysynthetically adv. by synthesis; in a synthetic manner adv. by synthesis; in a synthetic manner 综合地，合成地综合地，合成地

some of these drugs have been derived from opium and others some of these drugs have been derived from opium and others have been produced synthetically. have been produced synthetically. 这些毒品有的是从鸦片中得来的，而其他一些则是合成的。这些毒品有的是从鸦片中得来的，而其他一些则是合成的。


adverselyadversely adv. in an adverse manner adv. in an adverse manner 逆地逆地 , , 反对地反对地She was adversely affected by the new regulations. She was adversely affected by the new regulations. 新的规章制度给她带来了诸多不便。新的规章制度给她带来了诸多不便。Therefore, nations and states with high levels of pollution can Therefore, nations and states with high levels of pollution can

adversely affect those with the strictest pollution laws.adversely affect those with the strictest pollution laws. 因此，那些污染较严重的国家和地区反过来影响有着严格的污染因此，那些污染较严重的国家和地区反过来影响有着严格的污染法律规范的国家和地区。法律规范的国家和地区。

adverselyadversely adv. in an adverse manner adv. in an adverse manner 逆地逆地 , , 反对地反对地She was adversely affected by the new regulations. She was adversely affected by the new regulations. 新的规章制度给她带来了诸多不便。新的规章制度给她带来了诸多不便。Therefore, nations and states with high levels of pollution can Therefore, nations and states with high levels of pollution can

adversely affect those with the strictest pollution laws.adversely affect those with the strictest pollution laws. 因此，那些污染较严重的国家和地区反过来影响有着严格的污染因此，那些污染较严重的国家和地区反过来影响有着严格的污染法律规范的国家和地区。法律规范的国家和地区。

benchmarkbenchmark n. a standard by which something n. a standard by which something can be measured or judged can be measured or judged 基准基准


diligencediligence n.steady and careful application n.steady and careful application 勤奋，勤勤奋，勤勉勉

Care and diligence bring luck. Care and diligence bring luck.

谨慎和勤奋才能抓住机遇。谨慎和勤奋才能抓住机遇。

diligencediligence n.steady and careful application n.steady and careful application 勤奋，勤勤奋，勤勉勉

Care and diligence bring luck. Care and diligence bring luck.

谨慎和勤奋才能抓住机遇。谨慎和勤奋才能抓住机遇。

duedue adj. requisite; fitting; proper;adequate or adj. requisite; fitting; proper;adequate or

sufficient; enough sufficient; enough 适当的适当的 ; ; 应做的应做的 ; ; 应得的应得的 ; ; 足够足够

的的When is the train due at Shanghai?When is the train due at Shanghai? 火车该什么时候到上海火车该什么时候到上海 ??Her illness was due to bad food. Her illness was due to bad food. 她的病是坏了的食物造成的。她的病是坏了的食物造成的。

assumeassume vt. take power or responsibility vt. take power or responsibility 承担承担assume the reins of government assume the reins of government 执政执政 , , 开始掌权开始掌权assume a leading positionassume a leading position 担任领导职务担任领导职务assume responsibility assume responsibility 负责负责 , , 承担责任承担责任


commensuratecommensurate adj. corresponding in size or adj. corresponding in size or degree or extent degree or extent 相应的相应的 ,, 相称的相称的

The pay should be commensurate with the work. The pay should be commensurate with the work.

工资应与工作相称才是。工资应与工作相称才是。

commensuratecommensurate adj. corresponding in size or adj. corresponding in size or degree or extent degree or extent 相应的相应的 ,, 相称的相称的

The pay should be commensurate with the work. The pay should be commensurate with the work.

工资应与工作相称才是。工资应与工作相称才是。

Warren BuffettWarren Buffett 沃伦沃伦 ·· 巴菲特，世界上最伟大的巴菲特，世界上最伟大的投资者投资者 ,, 股神。股神。


distortiondistortion n. changing of something into something n. changing of something into something that is not true or not acceptable that is not true or not acceptable 歪曲，失真歪曲，失真a hopeless distortion of the truth a hopeless distortion of the truth

肆意歪曲真理肆意歪曲真理

distortiondistortion n. changing of something into something n. changing of something into something that is not true or not acceptable that is not true or not acceptable 歪曲，失真歪曲，失真a hopeless distortion of the truth a hopeless distortion of the truth

肆意歪曲真理肆意歪曲真理

Berkshire Hathaway 伯克希尔 -哈撒韦公司， 1965年 ,35岁的巴菲特收购的一家濒临破产纺织企业， 1994年底已发展成拥有 230 亿美元的伯克希尔工业王国，由一家纺纱厂变成巴菲特庞大的投资金融集团。

Berkshire Hathaway 伯克希尔 -哈撒韦公司， 1965年 ,35岁的巴菲特收购的一家濒临破产纺织企业， 1994年底已发展成拥有 230 亿美元的伯克希尔工业王国，由一家纺纱厂变成巴菲特庞大的投资金融集团。

curtailcurtail vt. place restrictions on vt. place restrictions on 限制限制

John's father curtail his allowance. John's father curtail his allowance.

约翰的父亲减少了他的零用钱。约翰的父亲减少了他的零用钱。

The minister had to curtail his visit. The minister had to curtail his visit.

部长不得不缩短访问日期。部长不得不缩短访问日期。


U.S. Federal ReserveU.S. Federal Reserve 美国联邦储备系统于美国联邦储备系统于 19131913年年国会立法通过后成立，是美国的中央银行。国会立法通过后成立，是美国的中央银行。

U.S. Federal ReserveU.S. Federal Reserve 美国联邦储备系统于美国联邦储备系统于 19131913年年国会立法通过后成立，是美国的中央银行。国会立法通过后成立，是美国的中央银行。

facilitatefacilitate vt.to make easier; assist the progress ofvt.to make easier; assist the progress of 使容使容易易 , , 使不费力使不费力 ,,帮助帮助 , , 促进促进Modern devices facilitatedomestic work. Modern devices facilitatedomestic work.

现代设备使家务活便利了。现代设备使家务活便利了。It would facilitate matters if you were more co-operative. It would facilitate matters if you were more co-operative.

要是你再合作些，事情就会变得更容易。要是你再合作些，事情就会变得更容易。The new underground railway will facilitate the journey to all The new underground railway will facilitate the journey to all parts of the city.parts of the city.

新的地下铁路将为去城市各处提供方便。新的地下铁路将为去城市各处提供方便。


Alan GreenspanAlan Greenspan 艾伦艾伦 ·· 格林斯潘（格林斯潘（ 19261926年年 33月月 66 日－），日－），美国犹太人，美国第十三任联邦储备委员会主席。美国犹太人，美国第十三任联邦储备委员会主席。他被媒体业界看做是“经济学家中的经济学家”和“大师”。

Alan GreenspanAlan Greenspan 艾伦艾伦 ·· 格林斯潘（格林斯潘（ 19261926年年 33月月 66 日－），日－），美国犹太人，美国第十三任联邦储备委员会主席。美国犹太人，美国第十三任联邦储备委员会主席。他被媒体业界看做是“经济学家中的经济学家”和“大师”。

Exercises of Unit 17Exercises of Unit 17

• True or False

• Case Analysis

• Discussion

Exercises of this UnitExercises of this Unit

True or FalseTrue or False

1. Forwards have the same meaning as futures. (1. Forwards have the same meaning as futures. ( ))

2. The value of a derivative is contingent on the value of the 2. The value of a derivative is contingent on the value of the underlying. The notional value of derivatives is recorded off underlying. The notional value of derivatives is recorded off the balance sheet of an institution, while the market value of the balance sheet of an institution, while the market value of derivatives is recorded on the balance sheet. (derivatives is recorded on the balance sheet. ( ))

3. Few types of derivative instruments may trade on 3. Few types of derivative instruments may trade on traditional exchanges. (traditional exchanges. ( ))

4. The ETD derivative market is the largest market for 4. The ETD derivative market is the largest market for derivatives, and is unregulated. (derivatives, and is unregulated. ( ))

5. Depending on the terms of the contract, the potential gain 5. Depending on the terms of the contract, the potential gain or loss on a derivative can be much higher than if they had or loss on a derivative can be much higher than if they had traded the underlying security or commodity directly. (traded the underlying security or commodity directly. ( ))

Text : ExerciseText : Exercise


True or FalseTrue or False

1. Forwards have the same meaning as futures. (1. Forwards have the same meaning as futures. (FF))

2. The value of a derivative is contingent on the value of the 2. The value of a derivative is contingent on the value of the underlying. The notional value of derivatives is recorded off underlying. The notional value of derivatives is recorded off the balance sheet of an institution, while the market value of the balance sheet of an institution, while the market value of derivatives is recorded on the balance sheet. (derivatives is recorded on the balance sheet. (TT))

3. Few types of derivative instruments may trade on 3. Few types of derivative instruments may trade on traditional exchanges. (traditional exchanges. (FF))

4. The ETD derivative market is the largest market for 4. The ETD derivative market is the largest market for derivatives, and is unregulated. (derivatives, and is unregulated. (FF))

5. Depending on the terms of the contract, the potential gain 5. Depending on the terms of the contract, the potential gain or loss on a derivative can be much higher than if they had or loss on a derivative can be much higher than if they had traded the underlying security or commodity directly. (traded the underlying security or commodity directly. (TT))


Case AnalysisCase Analysis

Read the materials below and try to analysis the Read the materials below and try to analysis the

two sides of the sword of financial derivatives. Will the two sides of the sword of financial derivatives. Will the

benefit attract you? Or are you scared by the high benefit attract you? Or are you scared by the high

risks?risks?



1. In recent years, derivatives have been associated with 1. In recent years, derivatives have been associated with a few truly notable events, including the collapses of a few truly notable events, including the collapses of Barings by René M. STULZ, Third Quarter 2005 Bank Barings by René M. STULZ, Third Quarter 2005 Bank (the Queen of England’s primary bank) and Long-Term (the Queen of England’s primary bank) and Long-Term Capital Management (a hedge fund whose partners Capital Management (a hedge fund whose partners included an economist with a Nobel Prize awarded for included an economist with a Nobel Prize awarded for breakthrough research in pricing derivatives). breakthrough research in pricing derivatives). Derivatives even had a role in the fall of Enron. Indeed, Derivatives even had a role in the fall of Enron. Indeed, just two years ago, Warren Buffett concluded that just two years ago, Warren Buffett concluded that “derivatives are financial weapons of mass destruction, “derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially carrying dangers that, while now latent, are potentially lethal.” Michael Morgenstern, the Milken Institute lethal.” Michael Morgenstern, the Milken Institute Review.Review.

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2. A U.S. exporter who expects to receive a €100 2. A U.S. exporter who expects to receive a €100 million payment for goods in six months. Suppose million payment for goods in six months. Suppose that the price of the euro is $1.20 today. If the euro that the price of the euro is $1.20 today. If the euro were to fall by 10 percent over the next six months, were to fall by 10 percent over the next six months, the exporter would lose $12 million. But by selling the exporter would lose $12 million. But by selling Euros forward, the exporter locks in the current Euros forward, the exporter locks in the current forward exchange rate. If the forward rate is $1.18 forward exchange rate. If the forward rate is $1.18 (less than $1.20 because the market apparently (less than $1.20 because the market apparently expects the euro to depreciate a bit), the exporter is expects the euro to depreciate a bit), the exporter is guaranteed to receive $118 million at maturity.guaranteed to receive $118 million at maturity.

（ END OF THE CASE ）

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Will the benefit attract you? Or are you scared by the Will the benefit attract you? Or are you scared by the high riskshigh risks 。。1. Although some serious dangers are associated with 1. Although some serious dangers are associated with derivatives, handled with care they have proved to be derivatives, handled with care they have proved to be immensely valuable to modern economies, and will immensely valuable to modern economies, and will surely remain so.surely remain so.

2. In the second example, the financial position is a 2. In the second example, the financial position is a forward contract, the risk is depreciation of the Euro, forward contract, the risk is depreciation of the Euro, and the exposure is €100 million in six months, which is and the exposure is €100 million in six months, which is perfectly hedged with the forward contract. Since no perfectly hedged with the forward contract. Since no money changes hands when the exporter buys Euros money changes hands when the exporter buys Euros forward, the market value of the contract must be zero forward, the market value of the contract must be zero when it is initiated, since otherwise the exporter would when it is initiated, since otherwise the exporter would get something for nothing.get something for nothing.

Text : Text : Key to Case AnalysisKey to Case Analysis

DiscussionDiscussion

Hedge is often mentioned in financial derivatives. Hedge is often mentioned in financial derivatives.

Discuss with your partner about the function of Discuss with your partner about the function of

hedging.hedging.

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AssignmentsAssignments

1.1. Review the Text .Review the Text .

2.2. Keep in mind Keep in mind

• the functions of financial derivatives the functions of financial derivatives

• Benefits and RisksBenefits and Risks of financial derivatives of financial derivatives

3.3. Do exercises in the book.Do exercises in the book.

unit 17: financial derivatives financial english

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