LESSON 16: BONDS

I. Match the words with the correct definitions.

A. cash flows B. equity C. mutual funds D. pension funds E. principal

F. maturity G. coupon H. insolvent I. creditors K. dividends
L. market makers M. bid price N .offer price O. yield P. unveiled
Q. speculators R. auctions S. unprecedented T. unglamorous U. staggeringly

1. part ownership of a company in the form of stock or shares.

2. unable to pay debts.
3. the money a company receives minus the money it spends during a certain period
4. funds operated by investment companies that invest people’s money in various assets.
5. the rate of income an investor receives from a security.
6. the price at which a seller is prepared to sell a security at a particular time.
7. the price at which a buyer in prepared to buy a security at a particular time.
8. funds that invest money that will be paid to people after they retire from work .
9. a person who buys and sell goods, property, currency or shares in a company in the hope of
making a quick profit.
10. to show or tell people about a new product or plan for the first time.
11. the amount of capital making us a bond or other loan.
12. businesses that buy and sell securities.
13. the amount of interest that a bond pays.
14. a public event at which things are sold to the person who offer the most money for them.
15. make someone feel interested, hopeful ect.
16. people or institutions to whom money is owed.
17. payments by companies to their shareholders.
18. having no precedent, novel.
19. the length of time for which a bond is issued until it is repaid.
20. not challenging; dull and lacking excitement.

Answer:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

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II. Choose the best alternatives to complete the sentences.

1. Companies are not obliged pay….. or repay share capital

A. dividends B. revenue C. perk D. bonds
2. UK government experience …… explaining their decisions to employees, investors,
and so on
A. on B. in C. with D. within
3. Bonds-issuing companies use investment banks to find…..
A. investors B. workers C. investigators D. staffs
4. Most lazy people are incapable of …. responsibility for themselves.
A. take B. taking C. taken D. to take
5. Pete, can I …… your money?
A. steal B. get C. borrow D. hire
6. In order to persuade investors…….., you need to write a business plan
A. investing B. invests C. invested D. to invest
7. People use….. such as cars, houses, and so on to apply for a mortgage
A. money B. shares C. bonds D. assets
8. Workers have to spend an amount of money for the government, which is called….
A. salary B. fee C. tax D. money
9. Some people are good….. management
A. on B. at C. in D. for
10. People would rather …. told what to do
A. be B. to be C. was D. are
11. Companies regular ....... their activities by issuing bonds
A. pay B. finance C. cash D. fund
12. Most bonds..... interest rates
A. has fixed B. have fixed C. has changed D. have changed
13. The price ...... a buyer is prepared to buy a security at a particular time
A. at which B. in which C. on Which D. what
14. Do banks tend .... lend to people who might ....repay?
A. in/ not be able to B. to/ not be able to
C. to/ be able to D. in/ be able to
15. Economic growth.... emerging markets is leading to greater purchasing power
A. with B. with the C. in D. in the
16. The fund invests in companies whose product and services generate long-term
economic, ..... and social benefits
A. ecology B. ecologist C. ecological D. ecologied

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17. Protection fund aims .... achieve a steady inflation protected return in euros
A. to B. for C. with D. by
18. Investments ..... globally with no restrictions as to country, currency or sector
A. are made B. make C. are effected D. realized
19. Any area of investment that promises growth is going to spark .... a little interest
A. less than B. more than C. more D. less
20. Bonds are very ..... way of raising money
A. interest B. interesting C. interested D. interests

III. Build the following sentences.

1. Company finance/ most/ activity/ by way/ internal/ generate/ cash flows.
………………………………………………………………………………………………
………………………………………………………………………………………………
2. Company/ general/ use/ investment/ bank/ issue/ bonds.
………………………………………………………………………………………………
……………………………………………………………………………………………...
3. Bondholder/ get/ back/ them/ original/ invest/ fix maturity date.
………………………………………………………………………………………………
……………………………………………………………………………………………...
4. Most/ bond/ have/ fix/ interest/ rate.
………………………………………………………………………………………………
……………………………………………………………………………………………...
5. Government/ also issue/ bond/ raise money/ and these/ consider/ a risk-free invest.
………………………………………………………………………………………………
……………………………………………………………………………………………...
6. Price/ bond/ vary/ inversely/ interest/ rate.
………………………………………………………………………………………………
……………………………………………………………………………………………...
7. Bond/ sale/ instrumental/ that/ can/ trade/ second/ bond/ market.
………………………………………………………………………………………………
……………………………………………………………………………………………...
8. Fund managers / and / speculator / rush / buy /government bonds.
………………………………………………………………………………………………
……………………………………………………………………………………………...
9. The central bank / will / create /new money / buy £75bn / assets.
………………………………………………………………………………………………
……………………………………………………………………………………………...

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IV. Translate into Vietnamese.
1. If they need to raise more money to expand their operations, they can either issue new shares
– or borrow money, usually by issuing bonds.
…………………………………………………………………………………………
…………………………………………………………………………………………
2. For investors, bonds are generally safer than stocks or shares, because if an insolvent or
bankrupt company sells its assets, bondholders are among the creditors who might get some
of their money back.
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
3. If tax revenue is insufficient, governments also issue bonds to raise money, and these are
considered to be a risk-free investment.
…………………………………………………………………………………………
………………………………………………………………………………………….
4. Only brave hearts would look at getting back into the stock market at the moment, as it is
still unclear whether we are headed for a worldwide recession or depression.
…………………………………………………………………………………………
………………………………………………………………………………………….
5. This fund aims to achieve a high and steady income and above average yield, whilst taking
into account the security of capital.
…………………………………………………………………………………………
………………………………………………………………………………………….

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