TLC - CCPA

Teacher: Osvaldo E. Montórfano Díaz

Translate into Spanish:
THE FOREIGN EXCHANGE MARKET

The Foreign Exchange Market is the market in which such national currencies as Dollars, Yen,
Pound Sterling and Euro are exchanged. The price at which such currencies are exchanged is the foreign
exchange rate. Activity in the foreign exchange market has expanded enormously in recent decades as the
result of rapid growth of merchandise trade, tourism, and especially international capital flows, that is
acquisition of real and financial assets across national borders. Several major U.S. banks maintain
inventories of foreign exchange in the form of foreign-denominated currencies held in branch of
correspondent banks in foreign cities. Exchange rates vary considerably over time. At the end of 1988, for
example, the U.S. dollar was worth fewer Japanese yen than at the end of 1983. The dollar depreciated
against the yen, or it is to say that the yen appreciated (became worth more) against the dollar.

Since the 70’s, most major currencies have been floating – exchange rates have been allowed to
change from day to day in the marketplace. Prior to 1970, governments aggressively intervened in foreign
exchange markets to fix or peg exchange rates at prearranged levels. The exchange rate is not a matter of
indifference to the nations involved. In fact, some major disputes have sometimes arisen as a result of the
decisions of some nations to keep exchange rates at certain levels rather than permitting them to float in
response to market forces.

THE BALANCE OF PAYMENTS

The balance of payments is an organized tabulation of all the financial transactions of one country
with other nations. The current account summarizes all transactions in currently produced goods and
services. The capital account tabulates capital movements across borders – changes in holdings of such
assets as real estate, securities, and bank accounts between countries. Except for a statistical discrepancy
owing to imperfection in data collection, the capital account and the current account sum to zero. That is, the
overall balance of payments is always zero. In the 1980’s, the United States experienced burgeoning deficits
in its international balance on merchandise trade, goods and services and current accounts. This implies an
equivalent offsetting change in the capital account, a massive net inflow of foreign capital, reversing the
experience of previous decades, in which the United States exhibited persistent surpluses in current account
and was a net exporter of capital to the rest of the world.

The exchange of goods and resources between countries often involves transaction costs. Businesses
may need to establish foreign offices for making contacts with other countries, hire attorneys to negotiate
trade contracts, license agreements and franchises, or employ middle-men and lobbyist to fight such
impediments to trade as import quotas, which is a restriction limiting the amount of foreign goods that may
be imported into a country. In some countries, like the United States, there is an anti-trust law in order to
allow free competition of smaller companies in a market that otherwise will be dominated by only one big
company, also, unfair competition is prosecuted to the fullest extent of the law in order to protect the
consumer and the law of supply and demand, and there are Intellectual Property Laws in force to protect the
goodwill of the business, copyrights and Trademarks.

International trade currently exceeds US$ 3.1 trillion per year. The United States alone imports in
excess of US$ 600 billion annually.

Weblography
http:// Principles of Macroeconomics/James F. Ragan, Jr., PhD. Lloyd B. Thomas, Jr., PhD.
 January 12, 20xx

Mrs.
Danielle Mars
General Manager
RTS COMPANY – ASUNCIÓN BRANCH
Calle Lomas 125
Asunción 1374
PARAGUAY

RE: Year-End Report

Dear Mrs. Mars,

I am hereby writing to you in order to remind you that up to date I have not received your Year-End
Report due the day before yesterday, January 10. I am sorry to rush you, but all the amounts had to be
entered into the system by the closing date of January 5. The software in charge of the accounting is
supposed to do all the pertinent computation, and you only had to enter the numbers in the correct computer
fields and then print the spreadsheet with the final numbers for your Balance Sheet and Income Statement,
and then complete your report. Any and all variations shall be completed by April 30. Afterwards, you must
call our external audit firm so they can perform a thorough audit of the ledgers of the company (Journal and
General ledger.)

Please remember to send me a report regarding any update made to the previsioning of the accounts
corresponding to bad debt, payable, receivable, fixed assets, and inventory; and follow up all the syndicated
loans and subordinated loans of the company.

Also, tell the customs clearance agent, hired by your office, to verify if the ship carrying our
merchandise that left the port of Baltimore to the destination port of Asunción will arrive according to
schedule. For your convenience I enclose copies of the pertinent bill of lading, invoice and packing list
corresponding to the cited shipment for the pertinent customs proceedings. You can also proceed with the
corresponding waybill for the items that have to be delivered to the city of Ciudad del Este by land
conveyance. They are items specially manufactured according to the technical specification given by our
main client in Paraguay, so please deliver them in a timely manner. You can add 20% to the net list prices for
suggested sale prices; raw prices of the items in question are not given.

Please let me know if you need any further clarification.

Sincerely,

Janet Roberts

Janet Roberts (Ms.)

Business Manager
RTS COMPANY
New York Head Office
125 East, 12th. St., Suite 1247