( ).
For each type of investment and for many of their derivatives there is a market. There is a market in money in London. It is not a physical marketplace: dealings take place over the telephone, and the price a borrower pays for the use of money is the interest rate. There are markets in commodities. And there is a market in government bonds and company shares: the stockmarket. The important thing is that no market is entirely independent of the others. The linking factor is the cost of money (or the return an investor can get on money). If interest rates rise or fall there is likely to be a ripple of movement through all the financial markets. Money will gravitate to where it earns the best return, commensurate with the risk the investor is prepared to take and the length of time for which he can tie up his money. This is the most important mechanism in the financial sphere. As a general rule:
The more money you have to invest, the higher the return you can expect.
The longer you are prepared to tie your money up, the higher the return you can expect.
The more risk you are prepared to take, the higher the return you can expect if all goes well.
In either type of market, the buyers and the sellers may deal with each other or they may deal through a middleman known as a marketmaker. If they deal direct, each would-be buyer has to find a corresponding would-be seller. If there is a marketmaker, a seller will sell instead to the marketmaker, who buys on his own account in the hope that he will later be able to find a buyer to whom he can sell at a profit. Marketmakers make a book in shares or bonds. They are prepared to buy shares in the hope of finding somebody to sell shares (which they may not even have) in the expectation of finding somebody from whom they can buy to balance their books. Either way, they make their living on the difference between the prices at which they buy and sell. Marketmakers (in practice there will normally be a number of them competing with each other) lend liquidity fluidity to a market. A potential buyer can always buy without needing to wait until he can find a potential seller, securities can readily be turned into cash.
VOCABULARY NOTES:
Derivatives
The linking factor ,
A ripple of movement through all the financial markets ,
To gravitate
Commensurate with
To tie up ()
A middleman
A marketmaker ; , ,
On ones own account
Fluidity .
2. :
, , , , , , , , , , , .
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3. :
1. This phone in the office is out of order. 2. His book is very popular and it really interests me. 3. That is my neighbours car. 4. There was a lady, a gentleman, a boy and a girl in the room.
5. The withered leaf has fallen to the ground. 6. I help up my foot to the fire to warm it. 7. He keeps his toy in a box.
4. :
1.Boris wakes up when it is already quite light. 2.He looks at his watch.3. It is a quarter to seven. 4.Quick! Boris jumps out of bed and runs to the bathroom.5.He has just time to take a cold shower and drink a glass of tea with bread and butter.6.He is in a hurry to catch the eight oclock train.
7.At the railway station he meets three other boys from his group. 8.They all have small backpacks and fishing rods.
9.In less than an hour they get off the train at a small station near a wood. 10.They walk very quickly and soon find themselves on the shore of a large lake. 11.The boys spend the whole day there fishing, boating and swimming.
12.They return home late at night, tired but happy.
5. , , , , .
1) Am I being waited for?
2) All your compositions will be returned next week.
3) Pronunciation is paid great attention to at our classes.
4) They were met by a guide at the station.
5) Ivanov was told to explain the reason of his being late.
