- •English for the master’s programm
- •In finance Содержание
- •Unit 1 money and its functions
- •Match each of the word on the left with the correct
- •3. Which of the following are true or false?
- •4. Match the terms with their Russian equivalents:
- •5. Match the two parts of the sentences:
- •6. Translate the sentences into English:
- •7. Translate the text in writing: Careers in Finance
- •The function of financial markets
- •1. Answer the questions:
- •2. Match each of the words on the left with the correct explanation on the right:
- •3. Complete the text by inserting the following words in the gaps:
- •4. Translate the sentences into English:
- •Primary and Secondary Markets
- •Unit 3 regulation of the financial system
- •Internationalization of financial markets
- •Answer the questions:
- •Match each of the words on the left with the correct explanation on the right:
- •Speak on:
- •4. Make written translation of the text into Russian:
- •5. Translate the text into English:
- •How bonds and common stocks are valued
- •Match each of the words on the left with the correct explanation on the right:
- •3. Translate the text into English:
- •Voting rights of shareholders
- •Preferred Stock
- •Common stock
- •Answer the questions:
- •Complete sentences by inserting the following words in the gaps:
- •Complete the text by inserting the following words in the gaps:
- •Speak on:
- •5. Make written translation of the text into Russian:
- •6. Translate the text into English:
- •Forward exchange contract
- •Fixed and option contracts
- •Answer the questions:
- •2. Match each of the words on the left with the correct explanation on the right:
- •3. Complete the text using these words:
- •4. Speak on:
- •5. Make written translation of the text into Russian:
- •6. Translate the text into English:
- •Unit 7 banking
- •Match the words with the definitions:
- •2. Complete the sentences using the words from the box:
- •3. Which of the following sentences are true or false?
- •4. Match the terms with their Russian equivalents:
- •5. Match the two parts of the sentences:
- •6. Make written translation of the text into Russian:
- •Islamic Banking
- •Unit 8 commercial and central banks
- •1. Answer the following questions:
- •2. Match the terms with their Russian equivalents:
- •3. Fill in the gaps with the correct variants:
- •4. Complete the sentences by inserting the following words in the
- •5. Make the written translation of the text into Russian: micro credit
- •Insurance companies
- •Life Insurance Companies
- •Property and Casualty Insurance Companies
- •Answer the questions:
- •Match each of the words on the left with the correct explanation on the right:
- •Translate the sentences into English:
- •Unit 10 pension funds
- •Annuities
- •Answer the questions:
- •Complete the text by inserting the following words in the gaps:
- •3. Speak on:
- •4. Translate the text into English:
- •Unit 11
- •Investment Funds
- •Answer the questions:
- •2. Match each of the words on the left with the correct explanation on the right:
- •4. Make the written translation of the text into Russian:
- •5. Translate the text into English:
- •Unit 12 taxation
- •Match each of the words with the correct explanation on the right:
- •2. Complete the sentences by inserting the words in the gaps:
- •3. Which of the following sentences are true or false?
- •4. Match the terms with their Russian equivalents:
- •5. Translate the sentences into English:
- •6. Render the text: концепция платежеспособности
- •Unit 14 classification of taxes
- •1. Answer the following questions:
- •2. Match the terms with their Russian equivalents,
- •3. Fill in the gaps with the correct variants.
- •4. Complete the sentences by inserting the following words in the
- •5. Translate the sentences into Russian:
- •6. Render the text переложение налогового бремени
The function of financial markets
Financial markets perform the essential economic function of channeling funds from those who have saved surplus funds, because they spend less than their income, to those who have a shortage of funds, because they wish to spend more than their income. Those who have saved lending funds are the lenders-savers and those who must borrow funds to finance their spending are the borrowers-spenders. The principal lenders-savers are households, but business firms and the government (particularly state and local government) as well as foreigners and their governments sometimes also find themselves with excess funds and so lend them out. The most important borrowers-spenders are business firms and the government, but households and foreigners also borrow to finance their purchases of cars, furniture and houses.
In direct finance borrowers borrow funds directly from lenders in financial markets by selling them securities (also called financial instruments), which are claims on the borrower’s future income or assets. While securities are assets for the person who buys them, they are liabilities (an IOU or a debt) for the individual or firm that sells (issues) them. For example, if General Motors needs to borrow funds to pay for a new factory to manufacture front-wheel-drive cars it might borrow the funds from a saver by selling him a bond, a security that promises to make payments periodically for a specified period of time.
Financial markets contribute to higher production and efficiency in the overall economy. They also directly improve the well-being of consumers by allowing them to time their purchases better. They provide funds to young people to buy what they need and can eventually afford, without forcing them to wait until they have saved up the entire purchase price. Financial markets that are operating efficiently improve the economic welfare of everyone in the society.
There are two ways that a firm or an individual can obtain funds in a financial market. The most common method is to issue a debt instrument, such as a bond or a mortgage, which is a contractual agreement by the borrower to pay the holder of the instrument fixed dollar amounts at regular intervals (interest payments) until a specified date (the maturity date) when a final payment is made. The maturity of a debt instrument is the time (term) to that instrument’s expiration date. A debt instrument is short term if its maturity is a year or less and is long term if its maturity is ten years or longer. Debt instruments with a maturity between one and ten years are said to be intermediate term.
The second method of raising funds is by issuing equities, such as common stock, which are claims to share in the net income (income after expenses and taxes) and the assets of a business firm. If you own one share of common stock in a company that has issued one million shares, then you are entitled to one one-millionth of the firm’s net income and one one-millionth of the firm’s assets. Equities usually make periodic payments (dividends) to their shareholders and are considered to be long-term securities because they have no maturity date.