Chapter 1 NTRODUCT[ON T0 INTERNAT0NAL FINANCE The Subiect Matter of InternationaI Finance The Environment of Internationa Finance The Theory of Comparative Advantage The Benefits of Studying InternationaI Finance The Structure ofThis Book Summary Key Concepts and Terms Questions Chapter 2 THE BALANCE OF PAYMENTS Definition of the Baance of Payments Baance of PavmentS Accounting Accounts of the Baance of Payments Surpuses and Deficits In the Baance of Payrments Accounts Internationanvestment Position The Current Account and the Macroeconomics The Economic Reationship between Current Account and FinanciaI Account Summary Key Concepts and Tems Questions Chapter 3 THE FOREIGN EXCHANGE MARKET The Basics of Foreign Exchange Market Spot Exchange Market，Exchange Rate Quotations，and Foreign ExchangeArbitrage The Forward Foreign Exchange Market Foreign Exchange Risk and Hedging Strategies Other Types of Exchange Rates Summarv Key Concepts and Terms Questions Chapte 4 INTERNAT0NAL MONETARY SYSTEM Definition of the InternationaI Monetary System The God Standard(1 876—1 944) Bretton Woods System(1 944--1 973) Foating Exchange Rate System f1 973--Now) Exchange Rate Systems in Practice Auments for Fixed and Foating Exchange Rates Summarv KeY Concepts and Terms Questions Chapte 5 EXCHANGE RATE DETERMINATION AND FORECASTING EXCHANGE RATES Exchange Rates Determination in the Short Run Purchasing Power Parity(PPP) Interest Rate Parity(IRP) Rea Interest Rates and Rea Interest Parity Exchange Rate Forecasting Summary Key Concepts and TermS Questions Chapte 6 FINANCIAL DERIVATIVES FOR CURRENCY RISK MANAGEMEN Currency Futures Currency Option Currency Swaps and Interest Rate Swaps Summary Key Concepts and Terms Questions Chapte 7 INTERNAT[ONAL FINANCIAL MARKETS Introduction to FinanciaI Market Internationa Money Market Eurocurrency Market Internationa Capita Market Eurobond Markets InternationaI Stock Market Summary Key Concepts and Terms Question Chapter 8 THE BALANCE OF PAYMENTS TMENT Easticity Approach(Reative Price Effects) The Absorption Approach(Income Effects) Summary 255Key Concepts and Terms Questions chapter 9 EQUILIBRIUM IN BALANCE OF PAYMENTS AND EXCHANGE RATE The Monetary ApproeachAppr2061ach The PortfoIio Baance Summary Key concepts and Terms Questions Chapter 10 MACROECONOMICS IN AN OPEN ECONOMY The Agggate Demand for the Aggregate Output 2 The IS,LM and BP Curves in an Open Economy Summary Key concepts and Terms Question Chapter 11 ECONOMIC POLICY UNDER FIXED AND FLOATING EXCHANG RATE SYSTEM Monetary Poicy,Fisca Poicy and Capita Mobiity Economic Poicy under Fixed Exchange Rate System Economic Poicy under Foating Exchange Rate System Summary Key concepts and Terms Question