第二章1.Balance of payments: The set of accounts recording all flow of value between anation's residents and the residents of the rest of the world during a period of time.2.International investment position:Complementing the balance of paymentsaccounts is a balance sheet called the international investment position.第三章1.Foreign exchange：Foreign exchange is the act of trading different nations’moneys.2.Exchange rate : An exchange rate is the price of one nation’s money in terms ofanother nation’s money.3.Spot exchange rate: The spot exchange rate is the price for “immediate”exchange.4.Forward exchange rate：The forward exchange rate is the price set now for anexchange that will take place sometime in the future.5.Foreign exchange swap外汇互换:A foreign exchange swap is a package tradethat includes both a spot exchange of two currencies and an agreement to the reverse forward exchange of the two currencies.6.Arbitrage: The process of buying and selling to make a (nearly) riskless pure profit.7.Depreciation: Under the floating-rate system a fall in the market price of acurrency.8.Appreciation:Under the floating-rate system a rise in the market price of acurrency.9.Devaluation : A discrete official reduction in the otherwise fixed par value of acurrency.10.Revaluation重估: The antonym describing a discrete raising of official par.第四章1.Exchange-rate risk : If the value of the person’s income, wealth, or net wealthychanges when exchange rates unpredictably in the future.2.Hedging : Hedging is the act of reducing or eliminating a net asset or net liabilityposition in the foreign currency.3.Speculating: Speculating is the act of taking a net asset position (“long”) or anet liability position (“short”) in some asset class, here a foreign currency. 4.Forward exchange contact: Forward exchange contact is an agreement to buy orsell a foreign currency for future delivery at a price.5.Forward exchange rate：It is the exchange rate at which a bank agrees to exchangeone currency for another at a future date when it enters into a forward contract with an investor.6.Currency futures: Currency futures are contracts that are traded on organizedexchange, by entering into a currency futures contract, you can effectively lock inthe price at which you buy or sell a foreign currency at a set date in the future. 7.Currency option : Currency option gives the buyer (or holder) of the option theright, but not the obligation, to buy foreign currency (a call option) or to sell foreign currency (a put option) at sometime in the future at a price set today.8.Currency swap: Two parties agree to exchange flows of different currencies duringa specified period of time.9.Covered international investment: Our pound liability in the forward contactmatches her pound asset position, so we have hedged her exposure to exchange-rate risk. We have a hedged or covered international investment. 10.Uncovered international investment:We do not know for sure what this futurespot exchange rate will be, so her investment is exposed to exchange-rate risk.This unhedged investment has a speculative element to it.11.Covered interest arbitrage: It is buying a country's currency spot and selling thatcountry's currency forward, to make a net profit from the combination of the difference in interest rates between countries and the forward premium on that country's currency.12.Covered interest parity: Since Keynes we have referred to the condition CD=0 ascovered interest parity.13.Uncovered interest parity: When the expected uncovered differential equals zero（EDU=0）,at least for the average investor, we have a condition called uncovered interest parity.14.Capital controls:It is restrictions on the ability of financial investors to transfermoneys in or out of the country.第五章：1.Purchasing power parity：The concept of purchasing power parity contains our core understanding of the relationship between product prices and exchange rates in the long run.w of one price:Law of one price posits that a product that is easily and freely traded in a perfectly competitive global market should have the same price everywhere ,once the price at different places are expressed in the same currency.3.Absolute purchasing power parity：Posits that a basket or bundle of tradable products will have the same cost in different countries if the cost is stated in the same currency.4.Relative purchasing power parity: Posits that the difference between changes over time in product-price levels in two countries will be offset by the change in the exchange rate over this time.5.Quantity theory equation：The quantity theory equation says that in any country the money supply is equated with the demand for money, which is directly proportional to the money value of gross domestic product.6.Overshooting:The rapid large reaction of the current exchange rate to such news asa change in monetary policy is called overshooting第六章1.Exchange control：The county's government places some restrictions on use of the foreign exchange market2.Capital control: Place limits or require approvals for payments related to some (or all)international financial activities3.Clean float: If government policy lets the market determine the exchange rate, the rate is free to go wherever the market equilibrium is at that time.4.Official intervention: The monetary authority enters the foreign exchange market to buy or sell foreign currency (in exchange for domestic currency) called official intervention.5.Dirty float（pessimistic)/Managed float(optimistic): A policy approach -an exchange rate that is generally floating (or flexible )but with the government willing to intervene to attempt to influence the market rate.6.Adjustable peg: In the face of a substantial or "fundamental "disequilibrium in the country's international position ,the government may change the pegged-rate value.7.Crawling peg:The Peg value is changed often according to set off indicators or according to the judgment of the government monetary authority.8.Sterilization:The authority separately takes another action to restore the domestic money back into the economy.9.Sterilized intervention: The authority relying only on intervention to defend the fixed rate.第七章1.Nationally optimal tax: I f a country looms large enough to have power over theworld market rate of return, it can exploit this market power to its own advantage, at the expense of other countries and the world as a whole.2.Contagion: When a crisis hits one country, it often spreads and affects manyother countries.3.Moral hazard: A large rescue package provides a bailout for lenders andborrowers when a crisis hits. But if lenders and borrowers expect to be bailed out, then they should worry less about the risk of a financial crisis. This leadsthem to lend and borrow more than is prudent.。