Situation 1

Mr. Pyres, the head of Manchester bank Accounting Department, explains the characteristics of the main financial instruments in Great Britain and the USA to a post-graduate student (choose any) and answers the following questions:

- How can you explain the fact that cheques are more popular than bills? What is the difference between them?

- If a cheque is a legal agreement then what are the parties of this agreement and what are their responsibilities?

- There is an opinion that a drawer of a cheque is more protected than a drawee or odinary creditor. How can you explain this point of view?

Situation 2

The client. You apply to the bank to cash the cheque which was given to you yesterday by Mr. X. You have to persuade the banker that he must repay the money according to Banking Laws.

The banker. Meanwhile, you get the notice from the police that Mr. X. was killed yesterday evening. So you refuse to cash the cheque until the police find out all the circumstances of the case.

Brainstorming activity

Problem 1

A banker got from his V.I.P. a client the cheque of another bank for cashing. It looked like a forged one. He couldn’t doubt the infallible reputation of his client and should accept it for payment. What should he do?

Problem 2

Company A holds the bills of its regular buyer company B. Company B notified company A about their financial difficulties and asked to postpone the redeeming of the bills until next month. What should company A do?

Final discussion

Preparing for final discussion, try to search for extra information in special editions, magazines and financial text-books. Consult your teachers of special subjects and use the Internet resources. It is recommended to subdivide the group into 3 subgroups for better organization of the discussion.

Questions for discussion:

1. What place do cheques occupy in the economic life of modern society?

2. Do you believe crossing on cheques makes payment safe? Give your reasons.

3. Speak on bills of exchange as negotiable instruments.

Unit 6. Bank Investments and common stocks Part 1. Reading Practice

Active Vocabulary

advance	—l) аванс, авансирование, 2) ссуда, заем
Al, first class, AA-rating (US)	— первоклассный
bond	—1) облигация, 2)закладная, 3) долговое обязательство
gilt-edged security (about bonds), blue chips (about stocks)	— первоклассные, особо надежные ценные бумаги
capital market	— рынок долгосрочного ссудного капитала
cash-in-banks	— банковская наличность
to diversify the capital (funds)	— вкладывать капитал в различные предприятия
fluctuation	— колебания, изменения курса
common stock (ordinary share)	— обыкновенная акция
preferred stock	— привилегированная акция
general obligation bond	— облигация под общее обязательство; муниципальная облигация
to issue bonds (v)	— выпускать облигации
money market	—1) денежный рынок, 2) рынок краткосрочного ссудного капитала
rate of return	—1) норма прибыли, 2) коэффициент окупаемости капиталовложений
reconciliation	— приведение клиентом учета своих операций в соответствии с учетом банка: согласование, выверка
revenue bonds	— облигации обеспеченные доходами от определенного объекта
tax-exempt	— не облагаемый налогом
working capital	— оборотный капитал
yield	—1) доход по ценным бумагам, 2) доход в виде процентов на вложенный капитал
to yield interest	— приносить процентный доход
listed security	— ценные бумаги, допущенные на биржу
to redeem a bond on a maturity date	— погашать облигации с наступлением срока
to be a legal entity	— являться юридическим лицом
to act in trust for smb.	— осуществлять операции по доверенности