Full name English for Finance

Student code Date: 4/12/2024 (1) – Test 3 – 60 minutes

I. Match the financial terms on the left with their correct definitions on the right.
1-___ 2-___ 3-___ 4-___ 5-___ 6-___ 7-___ 8-___ 9-___ 10-_____
1. Interest rate A. Costs incurred by a business to 1E. The additional amount charged or paid for
2. Budget operate and produce goods or services. borrowing or lending money.
3. Revenue B. A financial plan that outlines expected 2B. A financial plan that outlines expected
4. Liability income and spending for a period. income and spending for a period.
5. Profit C. A company’s financial obligations, 3G. The total money earned by a business from
6. Equity such as loans or unpaid bills. selling goods or services.
7. Inflation D. A portion of a company’s earnings 4C. A company’s financial obligations, such as
8. Dividend paid to shareholders as a reward. loans or unpaid bills.
9. Expense E. The additional amount charged or paid 5J. The money left after subtracting expenses
10. Asset for borrowing or lending money. from earnings.
F. The value of ownership in a business, 6F. The value of ownership in a business, often
often represented by shares. represented by shares.
G. The total money earned by a business 7H. The general increase in prices over time,
from selling goods or services. reducing the value of money.
H. The general increase in prices over 8D. A portion of a company’s earnings paid to
time, reducing the value of money. shareholders as a reward.
I. Something valuable that a company 9A. Costs incurred by a business to operate and
owns, like buildings, equipment, or produce goods or services.
money. 10I. Something valuable that a company owns,
J. The money left after subtracting like buildings, equipment, or money.
expenses from earnings.

II. Choose the correct answer from the options provided.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

1. What does the term c) Sales ledger d) Financial tests

‘bookkeeping’ originate from? d) Balance sheet 5. What is the purpose of an
a) The use of computers to record 3. What is the role of the IFSA? auditor's report?
data a) To publish management accounts a) To analyze the company's market
b) The practice of keeping financial b) To regulate national accounting position
records in books or ledgers standards b) To independently confirm the
c) The process of preparing c) To develop international accuracy of financial accounts
statutory financial accounts reporting standards c) To approve company strategy
d) The principle of consistency d) To enforce company trading laws d) To recommend new investments
2. What is NOT included in the 4. What kind of tests do auditors 6. What are the two types of
statutory financial accounts? perform to ensure assets exist? returns that investors expect from
a) Income statement a) Substantive tests shares?
b) Cash-flow statement b) Analytical tests a) Dividends and market growth
c) Strategic tests b) Dividends and profit margins
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c) Dividends and voting rights 18. What does the share price of a
d) Dividends and capital increase company reflect?
12. What is the primary listing? a) Its current profits
a) The first offering of shares to b) Its total assets
7. What does buying a share of a investors during an IPO c) Its number of employees
company mean? b) The first day a company is d) Its future earning potential
a) Lending money to the company created 19. What do institutional
b) Becoming an owner of part of the c) A list of companies regulated by investors focus on?
company the SEC a) Short-term price fluctuations
c) Getting a job at the company d) The name of the company’s CEO b) Long-term trends in the market
d) Managing the company’s 13. Why might a company issue c) Government tax policies
finances new shares? d) Individual consumer spending
8. Who decides how much profit a) To pay off its debts 20. What are the main types of
is distributed as dividends? b) To reduce the number of institutional investors?
a) The Board of Directors shareholders a) Pension funds, hedge funds,
b) The shareholders c) To raise more capital for growth investment banks, and insurance
c) The stock market regulators d) To avoid regulation companies
d) The government 14. Which organization regulates b) Retail investors and private
9. Why is the market the stock market in the United equity firms
capitalization of a company never States? c) Banks, governments, and retail
constant? a) Financial Services Authority investors
a) The company changes its product (FSA) d) Analysts, regulators, and
lines frequently b) Securities and Exchange individual stockholders
b) Share value fluctuates due to Commission (SEC) 21. What is the role of analysts
daily trading c) International Monetary Fund when a company reports good
c) The company pays dividends (IMF) financial results?
regularly d) Federal Reserve a) Downgrade the stock
d) The government adjusts it 15. Which organization regulates b) Announce changes in interest
annually stock market activity in the UK? rates
10. What does IPO stand for? a) SEC b) IMF c) Upgrade the stock and attract
a) Initial Private Offering c) World Bank d) FSA buyers
b) International Public Option 16. What is macro data? d) Sell the company’s shares
c) Initial Public Offering a) Data related to individual 22. What kind of investors are
d) Independent Private Organization companies most significant in today’s stock
11. What role do market b) Economic indicators like markets?
regulators play in an IPO? inflation and unemployment rates a) Retail investors
a) They determine the initial share c) Predictions about future profits b) Institutional investors
price d) Stock market analysis reports c) Private individuals
b) They provide loans to the 17. What is micro data in the d) Small business owners
company stock market? 23. How do lower interest rates
c) They buy the shares if no one a) Small changes in inflation rates benefit consumers?
else does b) Global economic trends a) They discourage spending
d) They ensure the company follows c) Information about individual b) They increase unemployment
regulations and avoids fraud companies c) They reduce inflation
d) Predictions for an entire industry d) They make borrowing money
cheaper

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III. Read the text and decide if these sentences are true (T) or false (F). If there is not enough
information, choose 'doesn't say' (DS).
Banking can be defined as the activity of accepting or borrowing money from clients, whether individuals or
companies, and then lending out this money to other individuals or companies in order to earn a profit.
Naturally the services offered by today's banks, as well as the types of bank in existence, are much more
multifaceted than this.
Types of bank
Some broad groups of banking categories are as follows:

1-___ 2-___ 3-___ 4-___ 5-___ 6-___

1. The principal aim of banking is to make a profit through borrowing and lending money. 1. T
2. Most private customers will have accounts with a retail bank. 2. T
3. Retail banks do not offer services to any kind of business. 3. F
4. Commercial banks are bigger organisations than retail banks. 4. DS
5. A company interested in increasing its capital through new shares would consult an investment 5. T
bank. 6. T
6. Private banks deal with people with a lot of money and investments.

IV. Read the text. Then match the follow-up sentences and phrases (A—F) with the gaps in the article.
1-___ 2-___ 3-___ 4-___ 5-___ 6-___
INVESTORS SHOULD LOOK BEYOND BRIC A. BRIC economies are likely Key
COUNTRIES, SAYS PWC REPORT to continue to benefit from 1E
(1) ______. “The World in 2050: Beyond the BRICs” report superior growth, from 2C
concluded that long-term prospects for China, India and other globalisation and from being 3A
so-called ‘E7’ economies (Brazil, Mexico, Russia, Indonesia economically 'coupled' with 4F
and Turkey) are still upbeat, but looks for the first time at an the developed economies. 5D
additional 13 emerging economies, which the firm argues also B. The rapid growth of the 6B
have the potential to grow significantly faster than the emerging economies does not
established Organisation for Economic Co-operation and mean the demise of the
Development (OECD) countries. established OECD economies.
(2) ______ “The global centre of economic gravity is already C. John Hawksworth, Head of
shifting to China, India and other large emerging economies, Macroeconomics at
and our analysis suggests that this process has a lot further to
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 run. (3) ______ India could grow to almost 90% of the size of PricewaterhouseCoopers LLP,
the USA by 2050. Brazil seems likely to overtake Japan by observed that:
2050 to move into fourth place, while Russia, Mexico and D. The Philippines, Egypt and
Indonesia all have the potential to have economies larger than Bangladesh also have high
those of Germany or the UK by the middle of this century. growth potential, but also
But the fastest mover could be Vietnam, with a potential high-risk levels.
growth rate of almost 10% per annum in real dollar terms.”
(4) ______. For example, it suggests that Nigeria, while high E. A report published by
risk, has the long-term potential to overtake South Africa to PricewaterhouseCoopers on
be the largest African economy by 2050. (5) ______. Tuesday has suggested that
However, with the possible exception of Vietnam relative to investors need to look beyond
Turkey, the additional analysis does not change the the BRICs (Brazil, Russia,
conclusion from earlier PricewaterhouseCoopers research that India and China) for future
the E7 will remain the largest emerging economies through to growth opportunities.
2050. Mr Hawksworth explained that: “(6) ______. In fact, it F. The report also highlights
should prove to be a boost for them through growing income that there are many other
from exports and overseas investments, even as the OECD alternatives worth
share of world GDP declines.' considering, depending on the
nature of the investment.

V. Read the text and choose the correct option.

1-___ 2-___ 3-___ 4-___ 5-___ 6-___
You might be asking yourself what tulips – you know the flowers 1. Tulip Mania is an example of ...
that you associate with Holland – and dot-coms have got in A. a good investment opportunity.
common. And how they are connected to the topic of stock market B. an economic bubble.
crashes and economic bubbles. Well, many economists believe that C. how to invest in the Dutch Stock
Tulip Mania was in fact one of the first examples of an economic Exchange.
bubble. 2. Why did the price of tulip bulbs
rise?
When the tulip flower was introduced into Europe, around 1634, it A. There was a shortage of bulbs.
immediately became very popular, especially in Holland where B. They were used to trade instead of
high society used it as a status symbol to show importance and money.
wealth. Due to all this interest, the prices of tulip bulbs started to C. They were popular and in demand.
rise dramatically and speculators began to buy bulbs in bulk in 3. What happened after prices
order to sell them on later at a higher price. They became very peaked?
wealthy in the process. The problem was that this speculation was A. Bulb dealers started trading abroad.
so extreme and prices reached such extreme levels, that they B. Bulb dealers imported other flowers.
eventually peaked and then imploded, bankrupting many people. C. People lost a lot of money.
4. In the late 1990s, dot-com
Does this sound familiar? Broadly speaking, it’s a similar scenario companies were quoted on the stock
to those that have been seen with stock market crashes, such as the exchange even if ...
1929 stock market crash in the USA, and the dot-com bubble of the A. they had no profits.
late 1990s and 2000, 2001. In this period, many new internet-based B. they were newly founded
companies were founded and there was a lot of market confidence companies.
in their future. Many of these dot-coms quickly went public with C. people were not confident about
incredibly high business valuations in spite of negative earnings. their future.
5. During this period, investors often
Investments in their shares rose dramatically. It seemed that as long invested ...
as a company had dot-com after their name, its share price would
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go through the roof. There were also a lot of investments from A. too much money in the same
individuals as well as venture capital from companies, without company.
paying much attention to the normal parameters for judging an B. without checking out the company
investment. At their peak, it is estimated that dot-com shares were thoroughly.
worth about 8% of the total of the US stock market. However, the C. when the share price was already too
bubble burst spectacularly in March 2000 and over the next year high.
many of the dot-com companies failed completely, never having 6. What happened in March 2000?
made a profit, and causing private and institutional investors to lose A. The dot-com companies failed to
hundreds of thousands of dollars. make a profit.
B. The economic bubble burst.
C. Trading in dot-com companies was
interrupted.