ECO365 Class 1
陈东尔 | 1/11/25





ECO365 CLASS 1 陈东尔 | 1/11/25
2

Disclaimer

The study handout you have received is a resource provided by Knowverse Culture Inc. and our
team of dedicated tutors. This handout is meant to enhance your study process and should be used
alongside, not in place of, your official university course materials, lecture notes, problem sets,
past exams, and other educational resources.

This handout is offered at no cost to students enrolled in Knowverse Culture Inc. classes and is
strictly for personal, educational use only. It is not intended for sale, distribution, or any
commercial purpose. We respectfully ask that you do not copy, reproduce, or distribute any part of
the handout without permission.

We appreciate your trust in Knowverse Culture Inc. and wish you great success in your studies and
exams.















ECO365 CLASS 1 陈东尔 | 1/11/25
3

本节课学习目标

Syllabus解析
• 占分
• Assignment要求 & 思路

Chapter 1
• Exchange Rate
• Cross Rate



Syllabus 解析
• Midterm Test 占 30%
o Date: 2.25 (in person)

• Quiz 占 15%
o Date: 3.14 (online & 9am – 9pm)
o 一般来说两道题目

• Final Exam 占 40%
o Exam period

• Assignment 占 15%
o 4.1 @ 9am








ECO365 CLASS 1 陈东尔 | 1/11/25
4
Assignment 解析
• 主要内容: 用虚拟的钱，在真实的外汇股票市场中，通过对市场进行分析，然后交易，总结写
成一篇paper。
• 教授看重的: 最后是否赚钱不重要，通过所学知识对市场进行分析的过程是重要的。
• 一共有100w加币可以支配。
• 可以买卖的: foreign currency，stock，commodity组成整个investment portfolio

• 写作思路:
o 多结合所学知识，例如你发现中国最近的Export变多，接着预测出Demand of Yuan will
increase，所以预测出Yuan会升值，这时候你选择买入人民币。
o 多看新闻，例如最近美国大选，由于一些原因，这时候可以猜测特斯拉股价可能会涨。
o 每次交易的原因，不管是买还是卖都需要说明清楚。带来的结果也要写清楚，例如股票
股票赚了或者赔了是为什么。
o 最后需要把所有的投资卖掉并且全部转换成加币，并最后计算出以加币为结算单位的盈
亏状况。
o 尽早开始。

• 长度要求:
o Excluding references the report should be no more than 3 single spaced pages in length







ECO365 CLASS 1 陈东尔 | 1/11/25
5
Chapter 1：Exchange Rate
• Definition: the number of domestic currency units needed to purchase 1 unit of foreign currency
o 例如:
o Foreign currency priced in domestic currency
o Direct quote


• Notation: E (or S)
o E代表 (Spot) Exchange rate

• 变化:
o If E increases then it means, domestic currency __________
o If E decreases then it means, domestic currency __________

• 另外，!" (indirect quote)
o Definition: the number of foreign currency units needed to purchase 1 unit of domestic currency
o 例如:


Example: let the USD (US dollar) be the domestic currency and the Great British Pound (GBP) the
foreign currency. A direct quote is 1.6365 dollars per pound, so an indirect quote is !!.$%$& = 0.6111
pounds per dollar.












ECO365 CLASS 1 陈东尔 | 1/11/25
6
Midterm必考题型 1: Trade Currency 交易外汇
• 有 Arbitrage
o Arbitrage is the existence of riskless profit
o Buy low & sell high

• Cross Rate (C)
o 会约分

• Example: consider the following direct quotes:
o 1.6365 dollars per pound,
o 0.8788 euros per USD and 1.4373 euros per GBP.
o Then the cross rate between USD and GBP using the euro as an intermediate currency, C, is























ECO365 CLASS 1 陈东尔 | 1/11/25
7
Practice: Suppose the Canadian dollar-U.S. dollar rate is 1.35 Canadian dollars (CAD) per U.S. dollar
(USD). The Euro-USD rate is 1.1864 euros per U.S. dollar. The Euro-CAD rate is 0.9824 euros per
Canadian dollar.
a. Calculate the cross rate between Canadian dollars (CAD) and U.S. dollars (USD) using the euro as an
intermediate currency.
b. Suppose an investor has 800,000 CAD. Calculate profits from triangular arbitrage which uses the
cross rate between CAD and USD.





























ECO365 CLASS 1 陈东尔 | 1/11/25
8
Ways to Eliminate Arbitrage:
• Commissions on trades

• Bid-Ask Spreads
o The bid is the price a buyer wants to pay for a good or asset.
o The ask is the price a seller wants for a good or asset.

Midterm必考题型 2: Bid – Ask Spreads
• 不会有 Arbitrage
• 只用 Ask price

Example: consider two foreign exchange markets, New York and Paris, as well as the USD-euro rate.
• NY: bid=1.1235 USD per euro. ask= 1.1239 USD per euro.
• Paris: bid=0.8897 euros per USD. ask= 0.89 euros per USD.
• Convert 1000 euros to USD in Paris then back to euros in NY. Determine if arbitrage exists.


















学霸联盟