Ordinary and preference shares
There are 2 main types of shares: ordinary shares and preference shares.
The majority of shares are issued in the form of ordinary. Ordinary shares represent ownership in a company and a claim on a portion of profits. Investors get one vote per share to elect board members who make major decision. If a company goes bankrupt and liquidates, the common shareholders will not receive money until the creditors, bondholders, and preferred shareholders are paid.
Preference shares represent some degree of ownership in a company. Usually a fixed dividend is guaranteed for such shares. Another advantage of preferred shares is that in the event of liquidation preferred shareholders are paid before the common shareholders. The safest shares are considered to be the investments in blue chip companies like Gazprom in Russia.
True or false questions_________________________________________________
1. Money market securities generally have high liquidity.
2. Commercial banks are the most dominant depository institutions.
3. Mutual funds are depository financial institutions.
4. Bonds are long-term debt obligations issued by corporations and government agencies to support their operations.
5. Mortgage is a money market security.
6. Both government and businesses issue shares
7. Capital market securities are used to finance real capital investments.
8. Long-term debt securities and bonds are equivalent terms.
9. Common stocks that pay no dividends are priced lower than dividend-paying stocks.
10. When interest rates go up, the market price of a bond increases.
Vocabulary test_______________________________________________________
1. A Stock Exchange … rules and regulations on many businesses in the country.
A) loses B) imposesC) impedes D) implies
2. Free trade regulations were … in Argentina, as early of 1920.
A) endorsed B) signed C) sealed D) engaged
3. He was charged with the… of currency regulations.
A) break B) breachC) breech D) breath
4. The usual reason for exemption from tax does not … in this case.
A) relate B) refer C) concern D) apply
5. An illegal security may force the seller … … their asset at a large discount.
A) to run out of B) to get away from C) to get rid of D) to escape
6. Usually shares give higher … on investment than bonds and saving accounts.
A) refund B) rebate C) returnD) reference
7. Passive investor … on the firm’s management.
A) implies B) exiles C) expires D) relies
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8. The safest investments are the shares of … companies.
A) red handed B) white collar C) blue collar D) blue chip
9. Profit share may be paid out in cash or company … or distributed to participants at retirement.
A) cheques B) stock C) options D) bonds
10. When money is …, credit falls, people and businesses borrow less at higher rates.
A) tightB) stuck C) pressed D) crude
Multiple choice questions_______________________________________________
1. New issue market is:
a. over-the-counter market
b. secondary market
c. primary market
d. stock exchange
2. British word for “stocks” is:
a. options
b. shares
c. securities
d. warehouses
3. Swaps are:
a. exchanges
b. liabilities
c. refund
d. derivatives
4. Which of the following types of assets is least risky?
a. long-term corporate bonds
b. short-term corporate bonds
c. stocks
d. options and futures
5. Which of the following types of assets represents ownership interest in a corporation?
a. options
b. accounts in a bank
c. stocks
d. bonds
6. “Liquidity” in financial terms is:
a. a feature of money to be exchanged into other currency
b. the best measure of risk of a financial asset
c. rate of return for an asset
d. the ease with which an asset can be sold at the published market price
7. Most bonds are:
a. interest-bearing obligations of governments and corporations
b. money market securities
c. saving accounts
d. loans
8. Money in notes and coins is called:
a. capital
b. expenses
c. assets
d. cash
9. The amount of money a lender receives for a loan or an investment, expressed as a percentage, is known as its return or:
a. installment
b. yield
c. taxation
d. margin
10. To let somebody else have the use of your money for a certain period of time, after which it must be paid back, is to…
a. credit
b. earn
c. borrow
d. lend
Translating___________________________________________________________
Наличие капитала – ключевая проблема любого бизнеса. Согласно бухгалтерскому определению капиталом называются все активы фирмы. По экономическому определению капитал разделяется на два вида - реальный, т.е. в материальной и интеллектуальной форме, и финансовый, т.е. в форме денег и ценных бумаг. Все чаще выделяют и третий вид — человеческий капитал, образующийся в результате инвестиций в образование и здоровье трудовых ресурсов. Финансы для бизнеса получают из различных источников, главными из которых являются следующие:
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· собственные деньги
· заимствованные деньги от банков или других людей, которые выдаются под залог собственности
· финансирование инвестиционными компаниями, заинтересованными в бизнес проекте
· выпущенные акции компании, которыми можно торговать на бирже
· правительство
Люди начинают и развивают бизнес, преследуя следующие цели:
· выживание на рынке товаров и услуг
· получение и увеличение прибыли
· расширение своей доли на рынке
· диверсификация – вложение денег в разные инвестиционные продукты
Defining the terms_____________________________________________________
| 1. bond | a) security that gives a right to buy or sell something in future |
| 2. share | b) agreements to buy and sell particular shares, goods on a particular date in the future at a fixed price |
| 3. swap | c) investing in a variety of financial instruments |
| 4. option | d) part ownership of a company |
| 5. security | e) fixed- interest debt, usually issued by government |
| 6. derivative | f) to trade one asset for another |
| 7. futures | g) a financial product such as an option that has a value based on the value of another asset |
| 8. diversification | h)written evidence of ownership |
Writing______________________________________________________________
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1. There are many ways of investing and a lot of places where your capital could be invested to. Analyze why some people choose different types of investments, explain their reasons for selecting various securities and other financial instruments.
2. Comment on the role of financial education in raising finance, playing on financial markets, and choosing the profession of working with money.
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