金融市场考试代写 ECOM137代写 全球金融市场代写 经济代写

ECOM137 China and Global Financial Markets

Duration:3hours

金融市场考试代写 Section 1 Are the following statements true or false? If false, give reasons. 1) Money has three main functions: a means of payment, a unit of

THIS IS AN OPEN BOOK EXAMINATION TO BE CONDUCTED ONLINE. YOU MAY REFER TO ANY OF THE COURSE MATERIALS, OR ANY OTHER SOURCE OF INFORMATION. YOU MAY ALSO USE A SPREADSHEET OR CALCULATOR.

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PLEASE ENSURE THAT YOUR WORKING IS CLEARLY SHOWN WITH ALL STEPS OF YOUR CALCULATION INCLUDED IN YOUR ANSWER DOCUMENT, INCLUDING ANY FORMULA USED.

When writing formulas, please note the following: 金融市场考试代写

• Itis acceptable to use the standard alphabet rather than greek  The following are recommended: m for μ, s for σ, w for ω, r for ρ, d for Δ, b for β.
• Formathematical operators: add +, subtract -, multiply *, and divide /.
• Whereappropriate, use an underscore to indicate a subscript, Eg r_f for r
• Usethe ^ character for power, eg x^2 for x², x^0.5 for √
• Asan alternative to x^.5 you may type sqrt(x).
• Usebrackets as To make your answer clearer use different brackets where appropriate, eg [] {} ().

Section 1 金融市场考试代写

Are the following statements true or false? If false, give reasons.

1) Money has three main functions: a means of payment, a unit of account and a store of value. [3 marks]

2) In most countries including China, demand deposits are considered as liquid as cash. [3 marks]

 3) One way to measure the relative size of market versus banks by the World Bank’s Global Financial Development Database is to calculate the log of the product of total value traded to GDP ratio and the total bank credit to GDP ratio. [3 marks]

4) The Fisher equation describes the relationship between the money supply, the money demand, and the interest rate. [3 marks] 金融市场考试代写

5) Under the interest rate liberalisation reforms in China, the lending rates floor and the deposit rates ceiling have both been completely abolished. [3 marks]

6) China’s bond markets are segmented into the interbank market, the exchanges, and bank counters. [3 marks]

7) There is only one state-owned credit rating company controlled by the People’s Bank of China. [3 marks]

8) The split-share structure reform in China aims at converting non-tradable shares such as state and legal person shares to tradable shares in the stock market. [3 marks]

9) The “ST” prefix to a stock name in the stock exchanges in China means the company is state-owned. [3 marks]

10) Before the regulatory reform in 2017, China’s model of financial regulation followed the institutional model. [3 marks]

Section 2 金融市场考试代写

1)

Shenzhen government has issued a 3-year coupon bond this year, with a face value of 20,000 RMB and a coupon rate of 8%.

Alice decides to buy the bond and hold it for one year. Suppose the price of the bond next year will depend on whether the economy recovers from the pandemic:

State of the economy	Probability	Price of the bond in 2023
Economy fully reopens	0.1	22,000
Economy partially reopens	0.7	19,000
Economy remains closed	0.2	17,000

a) What is Alice’s expected holding period yield? Please express the answer in percentages (%). [4 marks]

b) What is the standard deviation of the holding period yield? Please express the answer in percentages (%). [6 marks]

c) If the risk-free rate is 1%, what is the risk premium on this bond for Alice? Please express the answer in percentages (%). [2 marks]

d) Suppose the economy in2023 remains closed and Bruno buys this bond from Alice at the going price then. Suppose Bruno holds the bond until maturity. What is the yield of the bond to Bruno? Please express the answer in percentages (%). [6 marks]

2) 金融市场考试代写

The following table is taken from the Chicago Mercantile Exchange (CME) website, which lists the Chinese RMB/USD Options Quotes, in contracts of 1 million RMB.  The premium is quoted in USD per 1 RMB.  These are European options, meaning that they give the owner the right, but not the obligation to buy or sell the underlying asset at the strike price on the expiration date.

Expiration: SEP 2022

Strike price	Call price	Put price
$152,000	0.00487	0.00079
$153,000	0.00414	0.00106
$154,000	0.00348	0.00140
$155,000	0.00288	0.00180

Expiration: OCT 2022

Strike price	Call price	Put price
$152,000	0.00484	0.00096
$153,000	0.00414	0.00126
$154,000	0.00350	0.00162
$155,000	0.00292	0.00204

a) What does the number 0.00487 in the first table mean? [4 marks]

b) Given a fixed expiration date, why does the put price increase in the strike price? [4 marks]

Suppose you work for an American company, which has some Chinese supplier.  It’s May and you expect to pay RMB 3 million to your Chinese supplier in five months’ time. You would like to hedge against the short-run appreciation of RMB.

c) Suppose you use the options contracts above offered by CME. You want to guarantee that you will pay no more than $471,000 when payment comes in 5 months’ time. Which specific option should you use to hedge currency risk? Why? [8 marks]

3) 金融市场考试代写

According to China Merchant Bank’s 2020 Annual Report, as of 31 December 2020, the total assets are 8,361,448 million RMB and the total liabilities stand at 7,631,094 million RMB. From the Consolidated Statement of Profit or Loss, net interest income is 185,031 million RMB, the operating income 287,398 million RMB, and the net profit after taxation 97,959 million RMB.

a) What is China Merchant Bank’s debt to equity ratio in 2020? In class, we see that the debt to equity ratio of the US banking system is between 7 and 8.  Is China Merchant Bank more or less leveraged than the US banking system? [2 marks]

b) What is China Merchant Bank’s return on assets in 2020? What is its return on equity in 2020? Please express the answers in percentages (%). [4 marks]

Section 3 金融市场考试代写

Short Answers.

1)

Unlike many western countries, China has switched from a cash-based society to one that is dominated by mobile payments, skipping the credit cards almost entirely.

a) Compared to credit cards, what are the advantages of mobile payments? [4 marks]

b) Compared to credit cards, what are the disadvantages of mobile payments? [4 marks]

c) How does mobile payment impact the banking sector? [4 marks]

d) Why did the spread of mobile payments in China happen much faster than in other countries such as the US and the UK? [6 marks] 金融市场考试代写

2)

In China, commercial banks are an important player in the domestic bond market. According to an annual report released by China Banking Wealth Management Registration System.  In 2017, 42% of Wealth Management Plans (WMPs) sold by Chinese commercial banks are invested in the domestic bond market.

a) What are the two channels through which commercial banks participate in the bond market? [6 marks]

b) In 2017, the People’s Bank of China started to require banks to include WMPs into the calculations on prudence, capital adequacy and loan growth. What happened to the bond market subsequently? Why? [6 marks]

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