- •Unit the capital and bond market
- •Eurozone problems weigh heavily on equity capital markets
- •Exercises
- •Find in the text Ukrainian equivalents to the following words and word combinations and translate the sentences in which they are used.
- •Find in the text English equivalents to the following words and word combinations. Write your own sentences using them.
- •Here are some word-combinations from the text. Match and translate them into Ukrainian.
- •Match the sentence beginnings (1- 5) with the correct endings (a –e).
- •Match words and phrases in the box with their definitions.
- •Answer the questions.
- •Complete the sentences, using expressions from the box. Translate the sentences into Ukrainian.
- •Characteristics of Corporate Bonds
- •Read the text. Explain the following word combinations. Summarize the text in 50 words.
- •Call provisions
- •Match the responses on the right with the questions on the left.
- •Work in pairs. Discuss advantages and disadvantages of different types of bonds. Make up your own dialogues using the following words and word combinations.
- •Complete the following.
- •Answer the questions. Look at the text to help you.
- •Translate into English. Світовий ринок облігацій
- •Mark these statements t (true) or f (false) according to the information studied in the text and in the exercises. Correct them where necessary.
- •Listening
- •A). Listen to the text and complete the sentences with the necessary word combinations from the list.
- •Call provisions
- •Supplementary tasks
- •Study the images of the given bonds. Define their types, denomination| (face value), maturity, interest rates, issuers, and other information.
- •Helpful phrases for writing a summary.
- •Table 2 debt ratings
Answer the questions.
1. Contrast investors' use of capital markets with their use of money markets.
2. A bond provides information about its par value, coupon interest rate, and maturity date. Define each of these.
3. The U.S. Treasury issues bills, notes, and bonds. How do these three securities differ?
4. What is the purpose of municipal bonds? Distinguish between general obligation bonds and revenue bonds.
5. What does the phrase backed by the full faith and credit of the issuer mean?
6. What features do corporate bonds share?
7 What is the bond indenture?
8. What is collateral?
9. What are the main types of corporate bonds?
10. Distinguish between mortgage bonds and equipment trust certificates?
11. Define the main types of unsecured bonds.
12. Explain the meaning of speculative-grade bonds (junk bonds)?
13. What financial institutions can provide financial guarantees for bonds?
Complete the sentences, using expressions from the box. Translate the sentences into Ukrainian.
Coupons, bearer, bonds, The Internal Revenue Service, registered bonds, mergers, restrictive covenants, moral hazard problem, dividends, interest payments, the bond indenture, bondholders, "coupon interest payment," gets into trouble, the corporation's stockholders.
Characteristics of Corporate Bonds
At one time bonds were sold with attached ______that the owner of the bond clipped and mailed to the firm to receive interest payments. These were called _______because payments were made to whoever had physical possession of the bonds. __________did not care for this method of payment, however, because it made tracking interest income difficult. Bearer bonds have now been largely replaced by_________, which do not have coupons. Instead, the owner must register with the firm to receive________. The firms are required to report the name of the person who receives interest income. Despite the fact that bearer bonds with attached coupons have been phased out, the interest paid on bonds is still called the __________ and the interest rate on bonds is the coupon interest rate.
A corporation's financial managers are hired, fired, and compensated at the direction of the board of directors, which represents_________. This arrangement implies that the managers will be more interested in protecting stockholders than they are in protecting bondholders. You should recognize this as an example of the__________. Managers may not use the funds provided by the bonds as the bondholders might prefer. Since _________cannot look to managers for protection when the firm_________, they must include rules and restrictions on managers designed to protect the bondholders' interests. These are known as__________. They usually limit the amount of dividends the firm can pay and the ability of the firm to issue additional debt. Other financial policies, such as the firm's involvement in________, may also be restricted. Restrictive covenants are included in________. Typically, the interest rate will be lower the more restrictions are placed on management through restrictive covenants because the bonds will be considered safer by investors.