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Banking and International Finance.

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Introduction

Tutorial essay: Banking and International Finance Essay 2 (spring term) In describing his trading experience throughout the book, Rothchild mentions financial terms that can be unfamiliar to the reader. He has, however, written a glossary defining these terms, which appear to be different from formal definitions in many ways and for various reasons. Rothchild describes a technical analyst as 'a person who thinks market action itself can predict future course of markets; deluded individual'. The formal definition is 'Technical analysts try to forecast price movements by examining and charting the patterns formed by price history, trading volume, the ratio of advancing stocks to declining stocks, and other technical data'. Rothchilds definition is far less detailed as it doesn't include the elements technical analysts consider in their analysis, maybe because he himself only had a brief understanding of their roles. Also, he is critical of technical analysts by calling them 'deluded', implying they are fools. This may be due to the number of times he ended up unsuccessful after following their information. ...read more.

Middle

The various audiences targeted by the two different authors again justify this. Additionally, the definitions can be dissimilar in terms of the way the words are spelt, i.e., Rothchild spells rumours as rumors. This can be due to the different native languages of the authors. The definition of leverage has similarities such as they are both more or less the same length, easy to understand and written to the same degree of depth. However the main difference is that the formal definition uses examples to explain the meaning while Rothschild's definition does not. This analysis is evident by reading the formal definition- 'the use of various financial instruments or borrowed capital such as margin to increase the potential return of an investment' and Rothchild's version, 'controlling a large investment with a smaller amount of money; betting more than you can afford to lose'. There are three definitions of money supply, each consisting of different forms of money. They are distinguished by naming them M-1, M-2 and M-3. ...read more.

Conclusion

Inflation is a matter which is important because it involves the falling value of money. Inflation can be defined as 'the general rise in the price levels' in a given time period. It is measured by the changing index. However, 'rising inflation' is when the rate at which prices rise increases per time period. This means the effects of inflation worsen each time period. Rothchild's version is, 'period when things are worth more than money, and you have more of the latter'. This version, although puts the same point across, does not sound "professional enough" as it makes use of words like 'things' and 'you'. This may be done to make it more comprehensible to the average reader. After comparing and contrasting the two different versions of the definitions, we can point out that the most apparent differences were the different degrees of detail and depth; the complexity of languages used; the extent of formality in the language and the different grammar use. The main reasons for the dissimilarities were, the different audiences targeted by the authors; the different levels of knowledge of the authors and the different levels of explanation required by the readers. ...read more.

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