EXERCISES. Answer the following questions:

Answer the following questions:

1. What is a primary market?

2. What is a secondary market?

3. How are they interconnected?

4. What is a third market?

5. What is a fourth market?

II. Insert the right word or word-combination choosing from those given below.

exchange controls futures

weakness broker

exchanged samples

information fixed

products brokerage

1. We___ our dollars for Hryvnias.

2. The deal was transacted through a money_____ who was paid commission.

3. London FOX is a____ market for coffee, cocoa and other food.

4. The United Kingdom removed all________ in 1979.

5. They ran out of oil and had to buy on the_____ market.

6. The___ on this deal is 3%.

7 The sales conference is a good place to exchange_____.

8. The fabric___ were of good quality and we decided to order.

9. Despite the____ of sterling, money market rates remained_____ at just over 11%.

III. The Discount Market. Read the article below quickly to find out the functions the discount market performs.

The discount market {обліковий ринок) is the fusion {злиття, об'єднання) of the London markets for sterling money-market security and short-term sterling deposits in the operations of the discount houses.

For many years it was synonymous with the London money market but with the rise to prominence {важливість) of the parallel markets it became known as the 'traditional' money market in comparison especially with the inter-bank market in sterling funds. The discount market is a comparatively recent development in English monetary history. Its origins lie in the London bill market {ринок векселів) of the early 19th century.

Now this market in short-term financial instruments consists of ten big discount houses that are members of the London Discount Market Association, and simple bill-brokers (discount houses) who do not have a large portfolio. Through this market the Bank of England fine-tunes {регулювати коливання ринкових тенденцій) the nation's money supply.

The participants in the market specialize in 'bill-broking' {облік векселів) form of banking, i. e. the provision of short-term money by way of discounting bills to borrowers. Some twenty years ago much of the discount market's business was in treasury bills. Now the market deals in a wider range of short-term assets, in particular, bank bills and certificates of deposit. Generally speaking, the discount market performs the same function for the banks as the banks themselves perform for their clients: it employs profitable funds which are temporarily unused by banks and other financial houses. It participates substantially in the financing of the short-term requirements of the government by buying Treasury Bills; it holds short-term government bonds and thereby carries some of the Government's unfunded debt {поточна заборгованість); and it accepts and discounts bills of exchange, thereby financing short-term commercial operations and foreign trade.

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