TEST (01 – 04 – 2022) I Match up the following words and definitions A Premium B Put option C Speculator D Options contract E Rick F Borrow G Derivative H Guarantee I Fixed rate K Lender L Swap M Futures contracts N Underlying O Instrument P Hedging Q Stock index R Call option S Commodities T Exercise U Floating rate 1 A financial product such as an option (= the right to buy or sell something in the future) that has a value based on the value of another product, such as shares or bonds 2 Someth.
TEST (01 – 04 – 2022) I Match up the following words and definitions: A Premium B Put option C Speculator E Rick F Borrow G Derivative I Fixed rate K Lender L Swap N Underlying O Instrument P Hedging R Call option S Commodities T Exercise D Options contract H Guarantee M Futures contracts Q Stock index U Floating rate A financial product such as an option (= the right to buy or sell something in the future) that has a value based on the value of another product, such as shares or bonds Something valuable that you offer to someone with the agreement that they can keep it if you fail to pay a loan or what you promise A situation in which payments on a loan in one currency are exchanged for those in another The money that the writer of an option receives A contract giving the possibility to sell a specified quantity of securities, foreign exchange or commodities in the future, if it is advantageous to so Someone who anticipates future changes in a market and makes risky transactions, hoping to make a gain Raw materials such as agricultural products and metals that are traded on special exchanges Agreements to make or take delivery of specified commodities or financial instruments at a fixed future date, at a price determined when the contract is made The written legal agreement that gives someone the right to buy something such as shares at a later date or within a period of time at a particular price 10 The act of buying or selling the shares, etc that are mentioned in an options contract (= an agreement giving the right to buy and sell shares in the future) 11 A financial asset that can be bought or sold, such as a bond, share, or other security 12 The activity of reducing the risk of losing money on shares, bonds, etc that you own, for example, by buying futures 13 A series of numbers that shows changes in the average prices of shares on a particular stock market over time 14 An interest rate that can change over a period of time 15 The possibility that something bad or dangerous will happen 16 Used to describe the shares, etc to which something such as an option (= the right to buy or sell something in the future) relates 17 A financial organization or individual that lends money that is then paid back with interest 18 To take money from a bank or other financial organization with the intention of paying it back over a period of time, usually with interest added on 19 A contract giving the buyer the right, but not the obligation, to buy an asset in the future 20 An interest rate on a loan that is fixed when the loan is taken out and that does not change Answer: 10 11 12 13 14 15 16 17 18 19 20 II Choose the best alternatives to complete the sentences: Derivatives is a collective term for financial market products whose value depends the price of another underlying asset A on B in C with D upon If you exercise an option you use or implement the option, taking up the possibility or sell something A to buy B buy C buying D bought Futures contracts allow you to eliminate short-term A plan B goal C risks D benefits Futures contracts are to make or take delivery of specified commodities or financial instruments at a fixed future date, at a price determined when the contract is made A contracts B agreements C promises D acceptances The seller eliminates the risk that the price and the buyer the risk that it will rise A will drop B drop C dropping D to drop , much more derivatives usage is based on speculation than hedging nowadays A In fact B Although B Though D Because a future date the same amount of the currencies is re-exchanged at a predetermined exchange rate A On B In C At D By Derivatives have had a very bad A press B publicity C situation D issue Derivatives can to protect position A be used B use C be using D used 10 If you hedge you make transactions that are designed to risk regarding a particular price, interest rate or exchange rate A reduce B decrease C rise D increase 11 Financial institutions have to risks A have B take C make D receive 12 means protecting certain positions A Preventing B Hedging C Precluding D Prohibiting 13 Farmers can protect from the effect of poor crop yields A yourself B themselves C himself D herself 14 Top managers also have to deal any crisis that arises A on B with C of D in 15 Some people perform tasks better _ their own while others work better in teams A with B on C of D by 16 an organization has set objectives, it has to make sure that it achieves them A Before B Then C Lastly D After 17 I experience _ explaining difficult decisions to employees, investors, journalists, and so on A in B on C of D with 18 One of the most important responsibilities of a manager is to motivate the people _ report to him/ her A who B which C when D whom 19 People want to be interested _ their work and, given the right conditions, they will enjoy it A with B to C at D in 20 Some people are good management A at B on C for D of III/ Following completion of sentences The main derivatives/ futures, options / swaps ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Future contracts / agreements/ or take delivery/ specified commodities ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Future contracts / both sellers/ buyers to hedge/ reduce risks ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Buying a call option/ you the right/ an asset ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Buying a / gives you / to sell/ ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… The seller/ the risk that/ will drop ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Futures/ options/ traded by speculators hoping/ a profit/ price fluctuations ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Much more derivative usage is/ speculation/ hedging nowadays ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… If you think the price/ a stock/ in the next weeks, you can/ the right/ it ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 10 Derivatives are/ instruments that allow/ to speculate/ the future/ ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 11 European-style/ option/ can/ exercised/ their/ expiration/ date ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 12 Learners working/ organization/ use/ trade derivatives/ know/ a lot/ them ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 13 Derivatives/ very/ mysterious/ phenomenon ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 14 The dollar/ not/ the meantime/ gone up/ sharply ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 15 If/ they/ a bill/ coming up/ future/ will/ paid/ US dollars ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 16 Financial institutions/ be/ the risk/ reward business – to/ reward, / they/ have/ take/ a risk ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 17 They/ complicated, / and banks/ companies/ not fully/ understand them ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 18 However, if derivatives/ misused, / they/ the capacity/ cause/ great deal/ damage ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 19 Derivatives/ used/ protect/ positions, / although they/ give/ you/ exposure/ areas/ the bank/ decides ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 20 The sensible thing/ do/ be/ try/ hold/ US dollar/ assets ahead ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… IV Translate the following sentences into Vietnamese If they need to raise more money to expand their operations they can either issue new shares or borrow money ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Most of the smaller companies in any industry present no threat to the leader ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… This is especially true in recession when, for psychological reasons, distributors, retailers and customers all prefer to buy from big, well-known suppliers ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… These fixed exchange rates could only be adjusted (revalue or devalue) with the agreement of the international Monetary Fund ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… A listed firm has two routes to raising capital: one is through debt and one is through equity ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Buyouts occur when corporate raiders consider that a conglomerate resulting from a series of takeovers has not achieved synergy ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Hedge funds are private investment funds for wealthy investors that trade in securities and derivatives, and try to get high returns whether markets move up or down ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… Governments and central banks sometimes try to change the value of their currency by buying or selling their own currency ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… The main reason why Governments or central banks attempts to influence exchange rates are not very successful is that speculators have much more money than Governments ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 10 High-yield bond are investments in the debt of companies that have greater chance of defaulting ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 11 Global micro fund invests in all segments of global microfinance markets ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 12 Ethical growth fund aims to achieve the highest possible capital growth while investing only in ethically or socially responsible companies ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 13 Some customers are worried about internet security Consequently, they don’t want to online banking ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 14 Even though rents are high, branches in shopping centres are profitable ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 15 Most industrialized countries switched to a system of floating rates ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 16 Twelve states of the European Union introduced a single currency, the euro, to replace their national currencies ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 17 Gold convertibility ended because the Federal Reserve no longer had enough gold to back the dollar, due to inflation ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 18 Successful companies generally want to diversity: to introduce new products or services, and enter new markets ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 19 The executive directors of the bank are going to have a meeting to decide what to recommend to the shareholders ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 20 Auditors know a lot about accounting methods and acquire a lot of information about the companies whose accounts they audit ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… V Read the text carefully and the briefly answer the following questions Futures contracts is a form of investing that can provide diversification to a portfolio and help you manage risk Futures contracts apply to agricultural commodities, rising and falling as the supply and demand of items such as corn, steel, cotton and oil change You can make money trading futures if you follow trends, cut your losses and watch your expenses Futures markets have trends, just like other securities markets Commodities tend not to have the same volatility as stocks, but can also be less predictable When you identify a trend through rigorous research and testing, it represents your best chance to profit Research involves looking into which factors impact the supply and demand of the commodity that you're interested in Testing involves making simulated investments in futures that you think you see trends in, to see whether a real investment would have worked out Anyone who invests in futures long enough is going to purchase contracts that lose value If a particular contract starts to move contrary to your expectations, strongly consider selling short and taking a small loss The alternative may be waiting for the contract to rise in value, only to see it fall further Since every contract you buy is with the expectation that it will see gains within your time horizon, cutting losses short by selling will maximize the return that you get back to invest elsewhere, and offset other gains when you calculate income investment for your taxes Investors trade futures on margin, paying as little as 10 percent of the value of a contract to own it and control the right to sell it until it expires Margins allow for multiplied profits, but also make it possible to risk money you can't afford to lose Remember that trading on a margin carries this special risk Select contracts that expire after the time when you expect prices to reach their peak A March futures contract is useless if you buy it in January but don't expect the commodity to reach its peak value until April Even if April contracts aren't available, a May contract is more appropriate since you can sell it before it expires but wait until after the commodity's price has a chance to rise Questions: What futures contracts for you? A Manage risk B Save labor C Save money D invest elsewhere What commodities futures contracts apply to? A Forest products B All commodities C Agricultural commodities D Seafood products Who will buy the lost value contracts? A People who don't know business B Anyone who invests in futures long enough C People who don't know about futures contract D people who don't understand the law How investors trade futures contracts? A Margin B Stock C Bonds D Security The end ... using D used 10 If you hedge you make transactions that are designed to risk regarding a particular price, interest rate or exchange rate A reduce B decrease C rise D increase 11 Financial... ………………………………………………………………………………………………………… 10 Derivatives are/ instruments that allow/ to speculate/ the future/ ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 11 European-style/ option/... ………………………………………………………………………………………………………… 10 High-yield bond are investments in the debt of companies that have greater chance of defaulting ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 11 Global