- •Unit 5. Overview of the financial system
- •5.1 Getting started
- •5.2 Look through the following vocabulary notes which will help you understand the text and discuss the topic.
- •5.3 Reading Functions of Financial Markets and Financial Intermediaries
- •5.4 Comprehension
- •5.4.1 Answer the questions using the active vocabulary.
- •5.4.2 Mark these statements t(true) or f(false) according to the information in the text. If they are false say why.
- •5.5 Language practice
- •5.5.1 Match the English terms in the left-hand column with the definition in the right-hand column.
- •5.5.2 Complete the following text using suitable words or phrases from the box below.
- •Internationalization of financial markets
- •5.5.3 Complete the text. Replace the Russian words and phrases by English equivalents.
- •International Bond Market, Eurobonds, and Eurocurrencies
- •5.5.4 Text for discussion.
- •Financial Regulation
- •5.6 Render the passage in English using the English equivalents of the italicized phrases given in Russian. Express the main idea of the passage in one sentence.
5.5 Language practice
5.5.1 Match the English terms in the left-hand column with the definition in the right-hand column.
1 |
Asymmetric information |
A |
The process of indirect finance whereby financial intermediaries link lender-savers and borrower-spenders. |
2 |
Bond |
B |
Funds that accumulate investment dollars from a large group of people and then invest in short-term securities such as Treasury bills and commercial paper. |
3 |
Common stock |
C |
Foreign currencies deposited in banks outside the home country. |
4 |
Credit union |
D |
A financial market in which longer-term debt (maturity of periods greater than one year) and equity instruments are traded. |
5 |
Exchanges |
E |
A financial institution that provides services such as accepting deposits and giving business loans. |
6 |
Money market |
F |
Markets in which funds are transferred from people who have a surplus of available funds to people who have a shortage of available funds. |
7 |
Mutual bank |
G |
A long-term loan secured by real estate. |
8 |
Commercial bank |
H |
All resources owned by an individual, including all assets. |
9 |
Financial intermediation |
I |
The inequality of knowledge that each party to a transaction has about the party. |
10 |
Eurocurrencies |
J |
A secondary market in which dealers at different locations who have an inventory of securities stand ready to buy and sell securities to anyone who comes to them and is willing to accept their prices. |
11 |
Transaction costs |
K |
A bank owned by depositors. |
12 |
Mortgage |
L |
A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. |
13 |
Security |
M |
The time and money spent trying to exchange financial assets, goods, or services. |
14 |
Wealth |
N |
Secondary markets in which buyers and sellers of securities (or their agents or brokers) meet in one central location to conduct trades. |
15 |
Financial markets |
O |
A security that gives the holder an ownership interest in the issuing firm. This ownership interest includes the right to any residual cash flows and the right to vote on major corporate issues. |
16 |
A capital market |
P |
A claim on the borrower’s future income that is sold by the borrower to the lender. Also called a financial instrument. |
17 |
Over-the-counter market |
Q |
A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. |
18 |
Money market mutual funds |
R |
Member-owned financial co-operatives that are created and operated by its members and profits are shared amongst the owners. |