UNIT XXI

WORD-STUDY

Exercise 1. Check in a dictionary and translate the words listed below.

Nouns

basket, range, structure, supply, decision, environment.

Adjectives

whole, healthy, conscious, social, retired, rapid.

Verbs

prefer, buy, diversify, suffer.

Exercise 2. Read and translate the words of the same root.

1.to manage, management, manager, manageable

2.to limit, limit, limitation, limited, unlimited, limitless

3.to protect, protection, protector, protective, protectionism, protectorate

4.to provide, provider, provided (that), providing (that)

5.diverse, diversity, to diversify

Exercise 3. Match the equivalents of the terms.

a)securities, fund, range, goal, stock, income, payment, share.

b)платежи, цель, ценные бумаги, акция, поступления, акционерный капитал, безопасность, фонд, вознаграждение, линия, запас, гол, ряд.

UNDERSTANDING A PRINTED TEXT

WHAT THE EQUITY FUND?

Instead of putting all their eggs in one basket, international investors often invest in equity funds that spread the risk over a wide range of stocks. Essentially, equity funds allow investors to avoid the risk of losing all their money on one bankrupt company. The funds consist of a whole group of different securities, such as stocks and stock options, that are bought and sold for the fund by professional fund managers.

Many international investors prefer to leave the decisions on foreign equity investment to the highly skilled fund managers who know the individual markets and are better able to avoid costly mistakes. By buying a share in an equity fund, such as Far East fund are a growth stock fund, investors can diversify the risk over a wide range of companies. If any one company in an equity fund goes bankrupt, each investors suffers minimal loss because of the other healthy companies in the fund.

Politically or socially conscious investors such as college endowment funds may prefer to invest in equity funds that correspond to their economic and political goals. A fund investing only in companies that protect the environment, for example, may be of interest to people who want to accomplish specific socials goals with their money.

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There are many different equity funds available for their international investor. Growth stock funds invest primarily in stocks of companies that retain their earnings and concentrate on rapid growth. In an income stock fund, investment are made primarily in already established companies that pay consistent dividends. This type of investment may be of interest to a pension fund, for example, which needs a fixed income for payments to retired people. A country fund provides investors with an opportunity to share in the growth of specific foreign markets with limited risk.

There are two types of structures for equity funds. A “closed-and” investment fund, (called an “investment trust” in Britain) has a limited number of shares available. A new investor would have to buy shares in the fund through the open markets, where their price is determined by supply and demand. In an “open-end” investment fund (called a “unit trust” in Britain) new shares are simply issued whenever a new investor wants in, and the price is determined by the value of the fund’s holdings.

Notes:

growth stock fund – инвестиционный фонд, основной задачей которого является долгосрочный прирост капитала.

income stock fund – инвестиционный фонд, основной задачей которого является обеспечение текущего дохода.

country fund – локальный инвестиционный фонд

“closed – end investment fund” – инвестиционная компания закрытого типа “open-end investment fund ” - инвестиционная компания открытого типа

COMPREHENSION CHECK

Exercise 1. a. Do you agree that …

1.… putting all eggs in one basket exposes them to the risk?

2.… it is reasonable to use the help of professional fund magazines?

3.… there are not many equity funds available for international investments?

4.… the environists prefer to invest their money into companies that protect the environment?

5.… a “closed-end” investment fund issues shares whenever a new investor wants them.

b. Prove your answers.

Exercise 2. Match collocations suitable to the sentences below.

1.If your company …, you lose your money.

2.… know the individual markets.

3.A pension fund needs … for payments to retired people.

_______________________________

a fixed income, spread the rise, highly skilled managers, the value of the company,

goes bankrupt.

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