IV. Answer the questions

1. What do the money market consist of?

2. What can borrowers do through the money market?

3. What are the common money market instruments?

4. What is a repurchase agreement?

V. Are the following statements true or false? Find reasons for your answers in the texts

1. Organizations use the money markets as an alternative to borrowing from banks.

2. Money markets are a source of long-term finance.

3. All money market instruments pay interest.

4. Certificates of deposit are issued by major manufacturing companies.

5. Commercial paper is guaranteed by the government.

6. Some money market instruments can have more than one owner before they mature.

VI. Match the words in the box with the definitions below. Use the texts to help you.

cash flow liquidity redeemed

competitive maturity short-term

discount par value unsecured

1. a price below the usual or advertised price

2. adjective describing a good price, compared to others on the market

3. the ability to sell an asset quickly for cash

4. (in finance) adjective meaning up to one year

5. adjective meaning with no guarantee or collateral

6. repaid

7. the length of time before a bond has to be repaid

8. the movement of money in and our of an organization

9. the price written on a security.

VII. Match the two parts of the sentences. Look at the texts to help you

1. Most money market securities

2. A treasury bill is safe because it

3. Commercial paper

4. Certificates of deposit (CDs)

5. Repurchase agreements (repos)

1. is issued by corporations, so it is riskier than T-bills.

2. are short-term, liquid, safe, and sold at a discount.

3. is guaranteed by the government.

4. are short-term exchanges of cash for securities.

5. Are issued to holders of time deposits in a bank.

VIII. Over to you

What kind of money market instruments are you familiar with? Which ones would be most useful for your company, or for a company you would like to work for?

11. Test your English

Fill in the missing prepositions in the sentences below. Choose from the box.

on for in to of

1. The directors are interested in the prospects of future developments in South America.

2. At the meeting they will decide _____ financial targets for the next six months.

3. We look forward _____ receiving a detailed plan of the project.

4. The director gave a brief account _____ the company’s recent performance.

5. Future dividends will depend _____ the success of the new product.

6. The director stressed the importance _____ effective control on spending.

7. The marketing strategy is to concentrate _____ developing markets in Europe.

8. There is a need _____ a full risk assessment before going into these markets.

9. We must be aware _____ the attitude towards foreign investors.

10. There may be difficulties _____ enforcing contracts.

11. For the site construction we will rely _____ local contractors.

12. We have already reached agreement _____ local short-term credit.

13. It is necessary _____ everyone involved in the project to show respect _____ local customs.

14. We are proud ____ recent successes in these markets.

15. The sale of the building has been agreed subject _____ contract.

16. We are all involved ____ finding solutions to the current problems.

Key: 49 New markets: prepositions 2