Divide the text into logical group and give them titles.

Single out the main points of the text. Use the following opening phrases.

The text looks at (the problem of…)

The text deals with the issue of..

It is clear from the text that…

Among other things the text raises the issue of…

The problem of…is of great importance

One of the main points to be singled out is

Great importance is also attached to…

In this connection, I’d like to say…

It further says that…

I find the question of…very important because…

We shouldn’t forget that…

I think that…should be mentioned here as a very important…mechanism of….

 

Grammar Exercises

 

Investment Companies

1.

a) Read the text

b) Supply the articles where necessary.

c) Write down 3-5 questions about the text.

d) Say what advantages individuals have when they invest in investment companies.

Investment companies are... type of financial intermediary. They obtain money from investors and use it to purchase financial assets such as stocks and bonds. In return, the investors receive certain rights regarding... financial assets that the investment company has bought and any earnings that it may generate. In …simplest and most common situation, the investment company has only one type of investor - stockholders.

For an individual there are two advantages of investing in such… companies instead of investing directly in the financial asset that these companies own. Specifically, the advantages arise from (1) economies of scale and (2) professional management. In describing these benefits, let's consider... individual with moderate financial resources who wishes to invest in... stock market.

In terms of economies of scale, the individual could buy stocks in odd lots and thus have... diversified portfolio. However, the brokerage commissions on odd lot transactions are relatively high. Alternatively, the individual could purchase round lots, but would only be able to afford... few different securities. Unfortunately, the individual would then be giving up... benefits of owning a well-diversified portfolio. In order to receive the benefits of both diversification and substantially reduced brokerage commission, the individual could invest in the shares of... investment company. This is because economies of scale make it possible for an investment company to provide... diversification at... lower cost per dollar of investment than would be incurred by a small individual investor.

In terms of professional management, the individual investing directly in the stock market would have to go through all... details of investing, including making all buying and selling decisions as well as keeping records of all transactions for tax purposes. In doing so, the individual would have to be continually on the lookout for mispriced securities in... attempt to find undervalued ones for purchase, while selling any that were found to be overvalued. Simultaneously, the individual would have to keep track of... overall risk level of the portfolio that did not deviate from some desired level. However, by purchasing stock of an investment company, the individual can turn over all of these details to... professional money manager.

Investment companies have... problems but potential advantages to be gained from... investing in an investment company still outweigh any disadvantages, particularly for smaller investors.

Words you may need:

generate v (зд.) получати

economies of scale економія, яка зумовлена ростом масштабу виробництва

odd lot неповний лот

round lot повний лот

incur v приймати на себе витрати, терпіти збитки

to keep records реєструвати

to be on the lookout бути насторожі

mispriced securities цінні папери за ціною, яка завищена або занижена

to keep track (of) відслідковувати

deviate v відхилятися

money manager менеджер, який займається купівлею та продажем цінних паперів

 

Unit 17

 

foreign exchange market валютний ринок

legal tender законний платіжний засіб

monies грошові суми

rate of exchange курс обміну

unit of currency грошова одиниця

currency mix структура грошової маси

spot market ринок готівки

forward market форвардний ринок

futures market ф’ючерський ринок

currency options market ринок валютних опціонів¹

bid – ask spread різниця між цінами продавця та покупця

currency arbitrage валютний арбітраж

clearing порівняння деталей фінансової угоди перед розрахунком

Option (опціон¹) право вибору; право купівлі та продажу цінних паперів за обумовлену ціну в обумовлений термін