English for Finance (4 year) Exam questions
Types and functions of money.
Today money consists of paper bills, coins and checking deposits. Money can be paper, metal, electronic or plastic. Each country has its own basic unit of money. The money in use in a country is called its currency. Currency can be national and foreign. Money has three main functions: a unit of exchange, a unit of account and a store of wealth. We can accept money in exchange for goods and services. We set prices in money terms. We can save money for future purchases. The value of money results from the fact that people accept it as payment.
Financial Management.
The task of financial managers is to maximize the company profits, minimize costs and losses, raise funds and allocate financial resources. Finance Managers plan, control and coordinate the financial activity of the company. Basing on the results of the company performance managers can make financial forecast and develop financial plans. At the end of the fiscal year managers must prepare financial reports to evaluate the company performance. Finance Managers can use different financial instruments to achieve the company goals and optimize its activity. So, Financial Managers must attract the necessary equity or debt funds and allocate them effectively on favorable terms to maximize the company value.
Modern banking services
Modern banking technologies enable payment systems to process large volume of information faster, with great accuracy and security protection. Banking systems and financial markets become interconnected and use uniform documents and standards. Many international banks become part of international electronic network. Electronic systems are convenient and efficient, but very costly to install. Modern computer technologies improved the payment systems. Plastic card transactions effect fund transfers with terminals and cash-machines. Online banking, mobile banking, mail and telephone banking allows customers to conduct financial transactions at secure websites. Most bank use a combination of paper-based and electronic systems.
Types of loans. Credit risks.
A loan is a fixed amount of money given for a definite period of time. The client should return this money at the end of this time. People can borrow money for personal or business reasons. The banks grant business loans, house and car loans, consumer credits, student loans, long-term and short-term loans. The borrower must pay back the principal plus the interest on it. Personal loans are paid back in equal parts during the full period of loan. For business loans the principal' and the interest are paid at the end of the loan terms. Personal loans are returned from the personal income, business loans are paid from profits. Banks often ask for the security. It can be your personal property or business assets. The loan application package includes a set of documents to evaluate the customer creditworthiness.
Loans and investments contain three types of risks: economic risks, money risks and inflation risks. The longer is the maturity of the loan, the higher is the risk factor. Long-term obligations face the changes of the economic business cycles from prosperity to recession. Changes in interest rates and exchange rates influence the value of repayment. High inflation reduces the money value and purchasing power. Banks develop special security protection programs to avoid and minimize credit risks.
5. International organizations
International monetary system is a set of multinational agreements and institutions including the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development and other institutions. These are international government associations. They mobilize foreign and domestic capital and provide the financial support to developing countries. The international financial resources are available in the form of loans, tranches, and extended financing. To get financial support the countries must make reforms to correct economic and financial imbalance. As a result the nations become politically, economically and financially interdependent. Such international cooperation promotes economic growth and stability.
Foreign investments
Investment is the provision of money or capital to purchase financial instruments and other assets to gain profitable returns. Investors can be individuals, private or public companies, government bodies or combination of the above. Investments can be direct or portfolio. Foreign direct investments include joint ventures or foreign branches. Portfolio investments include supplying capital to a foreign company in a form of stocks and shares. Inv estors assess all risks and opportunities, try to minimize these risks, diversify portfolio and increase the rate of returns. Every project has its own rate of investment attractiveness. Foreign investment is a stimulating factor for economic development and improving living standards. Many rich countries follow the policy of friendly development. The governments of developing countries offer benefits to attract foreign investors.
Taxation
Taxes are compulsory financial contributions to the budget. Taxes are the most important source of government revenue. Taxes on income and capital are direct, taxes on goods and services are indirect. Taxes have three functions:
to cover government expenses,
to increase economic welfare of the country,
to promote stable economic growth.
Taxes can play fiscal, economic and social functions. Taxes provide revenues for local, regional and national budgets. We pay income, profit, excise, property, corporate taxes, value added tax and charges to Pension Fund, Employment Fund, Social and Medical Insurance Fund. Many countries have problems with taxation such as high tax rates and tax avoidance. Tax reforms must melude tax benefits, tax breaks, tax heavens and equitable tax distribution.
Financial plan.
Financial plan is an annual project for the company. The task of financial planning is to estimate future income, expenses and assets available and find effective ways of raising capital. The financial plan includes resources, equipment and inventory necessary to achieve the company goals. The plan is based on the main financial statements: the balance sheet, the cash flow statement and income statement. Financial plan includes revenue plan, expenditure plan and credit plan. The task of the Financial Manager is to describe the available and expected resources for the definite period of time. They must calculate necessary costs, identify all risks and develop the realistic budget.
Investment climate.
Investment climate include combination of economic and political factors that influence
development of international business .Investment climate can be favorable and unfavorable,
in other words attractive and unattractive. We can name push and pull factors stimulating
foreign investments. Pull factors include tax benefits, special economic zones, democratic
laws, political stability, cheap labor. Push factors include high inflation and interest rates
weak national currency, economic and political instability.
10. Central and commercial banks
Modern banking system includes the central bank and commercial banks. Central banks function for the government and other banks, not for private customers. They develop and implement the monetary policy and supervise over the banking system. They control the money supply, fix the minimum interest rates, issue coins and bank notes, influence exchange rates and act as lenders of last resorts to commercial banks with liquidity problems. Commercial banks offer a full range of financial services for individual and corporate clients. They accept deposits, provide cheque facilities, grant loans, arrange overdraft facilities, make transactions with currency and securities. Commercial banks act as, financial intermediaries on behalf of their clients. Modern tendencies in banking include merging of banks in financial supermarkets with retail and wholesale services.
11. Financial statements.
Every company must prepare financial statements which can be checked by external and internal auditors. These documents are available for the public and based on the company annual report. The set of documents for the audit reports include the balance sheet, profit and loss account and cash flow statements. Balance sheet shows the company financial position for the reporting period and show the company assets, liabilities and shareholders equity. Profit and Loss Account summarizes the company business activity for the definite period. It includes information about total sales, revenues, expenditures and losses. The cash flow statement shows the real cash available for every-day running of business. The objective of financial statements is to provide useful information for the users. Information can be presented in paper or electronic format.
Английский язык для финансов (4 года) Экзаменационные вопросы
1. Виды и функции денег.
Сегодня деньги состоят из бумажных купюр, монет и чековых депозитов. Деньги могут быть бумажными, металлическими, электронными или пластиковыми. Каждая страна имеет свою основную единицу денег. Деньги используемые в стране называют валютой. Валюта может быть национальной и иностранной. Деньги имеют три основные функции: еденица обмена, расчетная единица и средство накопления богатства. Мы можем принять деньги в обмен на товары и услуги. Мы устанавливаем цены в денежном выражении. Мы можем сэкономить деньги для будущих покупок. Значение денег связано с тем, что люди принимают это как платеж.
2. Финансовый менеджмент.
Задача финансовых менеджеров состоит в максимизации прибыли компании, минимизации затрат и потерь, привлекать средства и выделять финансовые ресурсы. Финансовый план менеджеров, контроль и координация финансовой деятельности компании. Основываясь на результатах деятельности компании менеджеры могут сделать финансовый прогноз и разработать финансовые планы. В конце финансового года менеджеры должны подготовить финансовые отчеты для оценки деятельности компании. Финансовые Менеджеры могут использовать различные финансовые инструменты для достижения целей компании и оптимизации ее деятельности. Таким образом, финансовые менеджеры должны привлечь необходимый капитал или заемные средства и распределять их эффективно на льготных условиях, чтобы максимизировать значение компании.
3. Современные банковские услуги
Современные банковские технологии позволяют платежным системам обрабатывать большие объемы информации быстрее, с большей точностью и защитой. Банковские системы и финансовые рынки стали взаимосвязанными и использование единые документы и стандарты. Многие международные банки стали частью международной электронной сети. Электронные системы являются удобными и эффективными, но очень дорогостоящими для установки. Современные компьютерные технологии улучшили платежные системы. Пластиковые карты проводят эффект перевода денежных средств с терминалами и банкоматами. Онлайн-банкинг, мобильный банкинг, почты и телефонный банкинг позволяет клиентам проводить финансовые операции на безопасных веб-сайтах. Большинство банков используют комбинацию бумажных и электронных систем.
4. Виды кредитов. Кредитные риски.
Кредит составляет фиксированную сумму денег выдается на определенный период времени. Клиент должен вернуть эти деньги в конце этого времени. Люди могут занимать деньги для личных или деловых целей. Банки выдают кредиты для бизнеса, на дом и автокредитование, потребительские кредиты, кредиты для студентов, долгосрочные и краткосрочные кредиты. Заемщик должен погасить основной суммы плюс проценты. Персональные кредиты выплачиваются в равных частях в течение всего срока кредитования. Для бизнес-кредитов основной интерес выплачивают в конце условий кредитования. Личные займы возвращаются из личного дохода, бизнес-кредиты выплачиваются из прибыли. Банки часто требуют обеспечение. Это может быть ваше личное имущество или бизнес-активы. Кредитный пакет приложений включает в себя комплект документов для оценки кредитоспособности клиентов. Кредиты и инвестиции содержат три типа рисков: экономические риски, денежные риски и инфляционные риски. Чем дольше срок кредита, тем выше фактор риска. Долгосрочные обязательства сталкиваются с изменением экономических циклов деловой активности от процветания к экономическому спаду. Изменения процентных ставок и валютных курсов влияют на величину погашения. Высокая инфляция уменьшает стоимость денег и покупательную способность. Банки разрабатывают специальные программы обеспечения безопасности для предотвращения и минимизации кредитных рисков.