Exercise 8. Think of the verbs and adjectives that are most commonly used with the following nouns

Give your own sentences to show you understand the difference.

Exercise 4. Study the following words and word combinations. Make your own sentences, using each of them. Translate the sentences into Russian.

Exercise 3. Match the term with its definition.

Exercise 2. Translate the following sentences.

Exercise 1. Explain why it is useful to be able to estimate and describe character.

1. What are the main functions of a central bank?

2. In what way can a central bank control the economy?

3. How can central banks control the money supply?

4. What is the most dramatic way of increasing or decreasing the mon­ey supply?

5. Does a central bank have to secure funding from any other source? Why?

6. Do the activities and responsibilities of central banks vary from country to country? Give your examples.

1. Don't bank on going abroad this summer, we may not have enough money.

2. The morning began fine, but now clouds are banking up.

3. I have always banked with the Royal Bank.

4. They have an access to huge banks of public data or library informa­tion.

5. The only way out is to ask your bank for a loan.

6. I am not sure if I should buy this suit. — Come on! It won't break the bank.

7. Mr. Smith had bankrolled them when they had nothing.

Discount house, deposit, loan, charter, lend, borrow, denomination, claim, installment, repository.

1. A place where you keep objects of a particular type.

2. A sum of money lent for an agreed period of time and at an agreed rate of interest.

3. Demand or request for a thing considered one's due.

4. A document granting rights, issued by a legislature.

5. Any of several usually equal payments for something.

6. Money left with an organization for safe keeping or to earn interest.

7. Class of measurement of money.

8. Company or bank on the discount market that specializes in discount­ing bills of exchange.

9. Acquire temporarily, promising or intending to return.

10. Allow the use of money at interest.

Risk; riskless; risky; desirable risk-return features; risk-taker; low-risk securities; risk-exposure; riskiness; insurable risk; at risk; put at risk; ran a risk; take a risk; risk capital; calculated risk; risk on.

Exercise 5. Explain the difference between:

Risk - hazard - jeopardy - peril.

Exercise 6. Think of the nouns that are most commonly used with the follow­ing adjectives:

Current, surplus, ongoing, efficient, competitive, negligible, profita­ble, trustworthy.

Exercise 7. Think of the nouns that are most commonly used with the follow­ing verbs.

Issue, sell, perform, save, cover, accumulate, flow, afford, meet, re­cover, incur, claim.

Fund, income, service, flow, deposit, borrower, claim, loan, fee.

Exercise 9. Make up your own sentences with any ten word-combinations from ex. 6, 7,8.

TEXT 7. FINANCE

The field of finance is broad and dynamic. It directly affects the lives of every person and every organization, financial and non-finan­cial, private or public, large or small, profit-seeking or non-profit.

One of the primary considerations when going into business is money. Without sufficient funds a company cannot begin operations. The money needed to start and continue operating a business is known as capital. A new business needs capital not only for ongoing expenses but also for purchasing necessary assets. These assets — inventories, equipment, buildings, and property — represent an investment of cap­ital in the new business.

Finance can be defined as the art and science of managing money. All individuals and organizations earn or raise money and spend or invest money. Finance is concerned with the process, institutions, markets, the instruments involved in the transfer of money among and between individuals, businesses and governments.

Finance can be defined at both the aggregate or macro level and the firm or micro level. Finance at the macro level is the study of financial institutions and financial markets and how they operate within the financial systems. Finance at the micro level is the study of finan­cial planning, asset management, and fund raising for business firms and financial institutions.

Finance has its origin in the fields of economics and accounting. Economists use a supply-and-demand framework to explain how the pric­es and quantities of goods and services are set in a free-enterprise or market-driven economic system.

Accountants provide the record-keeping mechanism for showing ownership of the financial instruments used to facilitate the flow of finan­cial funds between savers and borrowers. Accountants also record revenues, expenses, and profitability of organizations involved in the pro­duction and exchange of goods and services.

Large-scale production and a high degree of specialization of labour can function only if there exists an effective means of paying for produc­tive resources and final products. Business can obtain the money it needs to buy capital goods such as machinery and equipment only if the institutions and markets have been established for making savings avail­able for such investment. Similarly, the federal government and other governmental units can carry out their wide range of activities only if efficient means exist for raising money, for making payments, and for borrowing.

Financial markets, institutions or intermediaries, and business fi­nancial management are basic elements of well-developed financial sys­tems. Financial markets provide the mechanism for carrying out the allo­cation of financial resources or funds from savers to borrowers. Financial institutions such as banks and insurance companies, along with other financial intermediaries, facilitate the flow of funds from savers to bor­rowers. Business financial management involves the efficient use of fi­nancial capital in the production and exchange of goods and services. The goal of the financial manager in a profit-seeking organisation is to maximize the owners' wealth through effective financial planning and analysis, asset management, and of financial capital. The same financial management functions must be performed by financial managers in not-for-profit organizations, such as governmental units or hospitals, in order to provide the desired level of service at acceptable costs.

EXERCISES

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