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3.1. Complete this financial report using expressions from the text above:

Yesterday in Asia, in (1) …, the Hang Seng closed 1.6 per cent up at 15,657 exactly. In Tokyo the (2) … was also up, at 15,747.20. In (3) … last night, the (4) … closed 1.8 per cent

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higher at 10,824 exactly, and the hi-tech (5) … index was 3.3 per cent at 3,778.32.

Turning now to Europe, in early trading in (6) … the FTSE is 0.1 per cent down at 6,292.80. The French (7) … index is also slightly down at 6,536.85. The (8) … in Germany, however, is 0.1 per cent at higher at 6,862.85.

3.2. Use expressions from the text above to describe:

1) shares in companies like IBM, Kodak, and Procter and Gamble.

2) buying and selling of shares on a stock market.

3) a day with twice as many shares sold as usual on a par-ticular stock market.

4) shares that were worth $15 and are now worth $110. 5) a period when the stock market index has gone from

20,000 to 25,000.

6) the feelings of dealers who are optimistic that prices will continue to rise.

7) when a stock market index reaches 25,500 for the first time.

8) the level on a stock market index which may be difficult for shares to pass.

3.3. Is it usual in your country for ordinary people to own shares? Do people follow the stock market closely?

4. INVESTMENTS. BONDS

Text 4

Read the text and answer the questions: 1. What is an investment?

2. Is money deposited in a checking account an investment? 3. What is a bond?

4. What does the term unconditional liability’ mean? 5. How often is interest on bonds paid?

6. What is the face value of the bond?

7. When can the face value of the bond be received? 8. What is the bond’s redemption date?

9. What advantage do municipal bonds have over corporate ones?

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10. Which bonds usually bring higher interest, corporate or municipal?

11. Which bonds is a safer investment?

12. What is the price range of Series EE bonds? 13. What is interest on the bonds?

BONDS

Investments are savings that are put to work to earn more money. For example, money in a savings account is an investment because the savings account earns interest. Depositing money in a savings account is an easy way to invest money.

Like savings accounts, bonds are an unconditional liability, that is, the organization issuing bonds is liable to redeem the bonds and pay the interest promised at the stated period.

When you buy a bond, you are lending money to the organi-zation selling the bond. You become its creditor. Interest is typical-ly paid twice a year on most bonds. Each bond has its face value printed on the front of the bond certificate. The face value is the amount being borrowed by the seller of the bond. Interest is paid to the investor on that amount. The face value is paid on the bond’s redemption date.

Bonds issued by corporations are called corporate bonds. Bonds issued by city and state governments are called municipal bonds. Municipal bonds have an advantage over corporate bonds since the interest earned on the municipal bonds may not be subject to federal income tax. However, the interest rate on municipal bonds may not be as high as that earned on corporate bonds. On the other hand, municipal bonds are usually the safer investment.

The safest investments in securities, especially for small in-vestors, are federal government savings bonds. There are several types of these bonds but the Series EE savings bonds are the most popular with customers. Series EE bonds can be purchased for as little as $25 or as much as $5000. Savings bonds are bought at a lower price than their face value. For example, Series EE bonds are bought at half their face value. A $50 Series EE bond costs $25. When the bond is redeemed at the end of the stated period, the gov-ernment pays the face value. The difference between the purchase price of $25 and the face value of $50 is interest earned. A lower amount of interest is earned if these bonds are cashed before the

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end of the stated time period, which for Series EE bonds is 10 years.

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