Write questions that could produce the following answers.

1. They have to send their shareholders a report at the end of every financial year, including independently-audited financial statements, and hold an annual general meeting.

2. A market for young or small companies which do not want to have their shares traded on the major stock exchanges.

3. It issues new shares, offering them to existing shareholders first.

4. It's when a company chooses to issue new shares to existing shareholders rather than pay them a dividend.

5. They are generally entitled to vote at companies' General Meetings and to receive a dividend if the company makes a profit.

Find the words in the text which mean the following.

1 having a responsibility or an obligation to do something, e.g. to pay a debt

2 a person or organization to whom money is owed (for goods or services rendered, or as repayment of a loan)

3 to be insolvent: unable to pay debts

4 everything of value owned by a business that can be used to produce goods, pay liabilities, and so on

5 to sell all the possessions of a bankrupt business

6 money that a company will have to pay to someone else (bills, taxes, debts, interest and mortgage payments, etc.)

7 to provide money for a company or other project

8 money invested in a possibly risky new business

9 the people who begin a new company

10 the place in which a company does business: an office, shop, workshop, factory, warehouse, and so on

11 to guarantee to buy an entire new share issue, if no one else wants it

12 a proportion of the annual profits of a limited company, paid to shareholders

 

T 2 Listen to an extract from a midday financial market report on television. The newsreader mentions the prices of the following securities, currencies and commodities. In each case, does she say that the price has risen, fallen, or stayed almost the same?

 

	Risen	Fallen	Unchanged
Shares in London
Shares in Frankfurt
Shares in Paris
Shares in New York
The dollar against the euro
The dollar against the yen
The euro against the Swiss franc
The euro against the yen
Bonds in New York
Bonds in Frankfurt
Gold
Oil

 

Match the following words and definitions.

blue chip defensive stock growth stock insider share-dealing institutional investors mutual fund market-maker portfolio stockbroker

1 a company that spreads investors' capital over a variety of securities

2 an investor's selection of securities

3 a person who can advise investors and buy and sell shares for them

4 a stock in a large company or corporation that is considered to be a secure investment

5 a stock - in an industry not much affected by cyclical trends - that offers a good return but only a limited chance of a rise or decline in price

6 a stock - which usually has a high purchasing price and a low current rate of return - that is expected to appreciate in capital value

7 a wholesaler in stocks and shares who deals with brokers

8 financial organizations such as pension funds and insurance companies which own most of the shares of all leading companies (over 60%, and rising)

9 the use of information not known to the public to make a profit out of buying or selling shares

 

There is a logical connection among three of the four words in each of the following groups. Which is the odd one out, and why?

1 annual report - external auditors - financial statements - stockbroker

2 blue chip - defensive stock - growth stock - rights issue

3 bonus issue - dividend - over-the-counter - shareholder

4 creditor - market-maker - shareholder - stockbroker

5 debt - equity - share - stock

6 face value - market value - nominal value - par value

7 float - liquidation - share issue - underwriter

8 institutional investor - insurance company - liabilities - pension fund

9 mutual fund - portfolio - risk - underwriter

8. Speak on companies.

Unit 4. BONDS

 

1. In Tom Wolfe's novel, The Bonfire of the Vanities, Sherman McCoy is a bond dealer in New York. One weekend his six-year-old daughter comes up with a question.

'Daddy.,. what do you do?'

'Well, I deal in bonds, sweetheart. I buy them, I sell them, I —

'What are bonds? What is deal?"

'Well, honey, bonds are - a bond is - well, let me see. What's the best way to explain it to you... A bond is a way of loaning people money. Let's say you want to build a road, and it's not a little road but a big highway, like the highway we took up to Maine last summer. Or you want to build a big hospital. Well, that requires a lot of money, more money than you could ever get just by going to a bank. So what you do is, you issue what are called bonds.'

'You build roads and hospitals. Daddy? That's what you do?'

No, I don't actually build them, sweetheart. I handle the bonds, and the bonds are what make it possible —'

You help build them?"

'Well, in a way.'

'Which ones?'

'Which ones?

'You said roads and hospitals."

'Well not any one specifically.'

'The road to Maine?'

(Tom Wolfe: The Bonfire of the Vanities)