Word List

1. mortgage - іпотека

2. maturity date - дата погашення

3. expiration date - дата закінчення терміну

4. equity – фондова акція, акціонерний капітал

5. net income - чистий прибуток

6. share (Br.E.)/ stock (Am.E.) - акція

7. share of common stock – звичайна акція

8. be entitled to – мати право на

9. residual claimant – претендент на дохід в останню чергу

10. profitability – рентабельність, прибутковість, корисність

11. confer ownership rights on – надавати право власності на

12. initial buyer – початковий покупець

13. underwrite securities – гарантувати розміщення цінних паперів

14. foreign exchange market - ринок іноземних валют

15. futures market - ф'ючерсний ринок, ринок з тривалим терміном поставок

16. option market - ринок опціонів, ринок по операціях на строк

17. be relevant to мати безпосереднє відношення до

18. conduct trades – проводити торги

19. stock exchange – фондова біржа

20. over-the-counter (OTC) market - позабіржовий ринок цінних паперів, ринок без посередників

21. negotiable certificates of deposit – депозитний сертифікат, що вільно обертається

22. banker’s acceptance - банківський акцепт, акцептований банком вексель

Vocabulary Practice

Exercise 5. Translate the following word-combinations from English into Ukrainian: to issue a debt instrument, interest and principal payments, a share in the net income, to own a share of common stock, to assist in the initial sale of securities, to acquire no new funds, to sell financial instruments to raise cash, to focus on the behavior of secondary markets, to conduct trades, an inven­tory of securities, original maturity of less than one year, to have smaller fluctuations in prices.

Exercise 6. Translate the following word-combinations from Ukrainian into English: залучати кошти, сплачувати власнику фіксовану суму, випускати акції, активи бізнесу, довгострокові цінні папери, вибирати керівників, отримувати користь безпосередньо від, надавати право власності на, початкові покупці, позабіржові дилери, оборотний депозитний сертифікат, купувати та продавати державні облігації.

Exercise 7. Match the beginnings with the endings of the following phrases.

beginnings		endings	translation
net	f	markets
expi­ration		exchanges
share of common		securities
maturity		holders
residual		stock
equity		income
by underwriting		date
futures		instruments
options		claimant
stock		j. date
equity		markets

Vocabulary Practice +

Exercise 8. Put the words into the correct column: authorize, bankruptcy, billion, borrower, capital, consignment, creditor, currency, dividend, economy, endowment, financial, fluctuate, homeowner, inflation, insurance, internet, monetary, monopoly, percentage, profiting, repayment, salary, shareholder, signature, taxable, taxation, transaction, turnover, withdrawal.

I - -	- I -
Authorize,	Consignment,

Exercise 9. Complete each sentence using a word based on the root word given in bold type. Then underline the stress of the word you have written. You may need a prefix (for example un-).

1. certify - My share certificates are deposited with my bank.

2. partner - JKK Industries and Marlowe Manufacturing have gone into ___________ with each other.

3. percent - They pay us a small _______________ in commission.

4. globe - The clothes are made in China, packaged in Italy, and sold in the USA. This is an example of _______________.

7. liquid - As they are unable to repay debts, Northern technologies will have to go

into _______________.

8. benefit - Who are the main _______________ of the will?

9. insure - This building cannot be insured. It is _______________.

10. convert - This currency only became _______________ outside the country last year.

11. possess - Malcolm defaulted on his mortgage repayments, so eventually the bank

_______________ his house.

12. receive - Who was the _______________ of this payment?

Exercise 10. Complete the table, and underline the stress in each word.

Abstract noun	verb	Adjective/ past participle as adjective	person
finance	To finance	financial	financier
		regulated
		insurable / insured
		guaranteed
		economic / economical
		invested
		signed
		analysable / analysed

Exercise 11. Fill in the missing words.

1. The basic function of financial markets is to _______ funds from savers who have an excess of _______ to spenders who have a _______ of funds.

2. Financial markets can channel funds either through _______ finance, in which borrowers borrow funds directly from lenders by selling them securities, or through indirect finance, which involves a _______ intermediary who stands between the lender-savers and the borrower-spenders and helps transfer funds from one to the other.

3. The channeling of funds improves the economic welfare of everyone in the society because it allows _______ to move from people who have no productive investment _______ to those who have such opportunities, thereby contributing to increased efficiency in the economy.

4. Financial markets can be classified as _______ and equity markets, primary and _______ markets, exchanges and _______ markets, and money and _______ markets.

5. An important trend in recent years is the growing internationalization of _______ markets.

6. Financial intermediaries are financial _________ that acquire funds by issuing liabilities and in turn use those _______ to acquire assets by purchasing securities or _______ loans.

7. Financial intermediaries allow small ______ and borrowers to benefit from the existence of financial markets, thereby _______ the efficiency of the economy.

Discussion

Exercise 12. Using the information from the text and your knowledge of financial system complete the following sentences.

1. Secondary markets can be organized in two ways: …….

2. A firm or an individual can obtain funds in a financial market in two ways: …

3. Secondary markets serve two important functions: ……..

4. The main disadvantage of owning a corporation’s equities rather than its debt is …….

5. The advantage of holding equi­ties is …….

6. The difference between primary and secondary markets is …….

7. The best-known examples of secondary markets ……..

8. The difference between brokers and dealers is ……..

9. Other over-the-counter markets include those that trade other types of financial instruments such as …….

10. The difference between money and capital markets is …….

Exercise 13. Mark the following statements T (true) or F (false). If the statement is false, correct it.

1. A debt instrument is a contractual agreement by the borrower to pay the holder of the instrument fixed sum of money at regular intervals until a specified date, when a final payment is made.

2. The example of a debt instrument is common stock.

3. The second method of raising funds is by issuing equities, such as a bond or a mortgage, which are claims to share in the net income (income before expenses and taxes) and the assets of a business.

4. Equities often make periodic payments (dividends) to their holders and are considered short-term securities because they have no maturity date.

5. The main disadvantage of owning a corporation’s equities rather than its debt is that an equity holder is a residual claimant.

6. The advantage of holding equities is that equity holders benefit directly from any increases in the corporation’s profitability or asset value because equities confer ownership rights on the equity holders.

7. The primary markets for securities are well known to the public because the selling of securities to initial buyers is a public procedure.

8. By underwriting securities investment bank guarantees a price for a corporation’s securities and then sells them to the public.

9. Dealers are agents of investors who match buyers with sellers of securities; brokers link buyers and sellers by buying and selling securities at stated prices.

10. When an individual buys a security in the secondary market, the person who has sold the security receives money in exchange for the security, but the cor­poration that issued the security acquires no new funds.

11. The higher the security’s price in the secondary mar­ket, the higher will be the price that the issuing firm will receive for a new security in the primary market and hence the greater the amount of capital it can raise.

12. OTC market is a market where buyers and sellers of securities (or their agents or brokers) meet in one cen­tral location to conduct trades.

13. Over-the-counter dealers are in computer contact and know the prices set by one another.

14. The U.S. government bond market, with a larger trading volume than the New York Stock Exchange, is set up as an over- the-counter market.

15. Other over-the-counter markets include those that trade other types of financial instruments such as negotiable certificates of deposit, federal funds, banker’s acceptance, and foreign exchange.

16. The capital market is a financial market in which only short-term debt instruments (original maturity of less than one year) are traded.

17. The market in which longer-term debt (original maturity of one year or greater) and equity instruments are traded is called money market.

18. Money market securities are usually more widely traded than longer-term securities and so tend to be more liquid.

19. Short-term securities have longer fluctuations in prices than long-term securities, making them safer investments.

20. Corporations and banks actively use this market to earn interest on surplus funds that they expect to have only temporarily.

21. Capital market securities, such as stocks and long-term bonds, are often held by financial intermediaries such as insurance companies and pension funds.

Exercise 14. Define what market each of the following statements refers to:

1. Deal with issuing equities or debt instruments.

2. Deal with the stages of selling securities.

3. Can be organized in two ways: exchanges and OTC markets.

4. Deal with the forms of organization of the trades.

5. The procedure of selling is organized publicly.

6. When the securities of a corporation are first sold in this market a corporation acquires new funds.

7. Formed on the basis of the maturity of the securities traded in each market.

Exercise 15. Check your knowledge of financial system and financial markets as its key component.