5. Answer the following questions based on text a:

1. What is stock exchange?

2. Where are the British Stock Exchange and the New York Stock Exchange located?

3. What is the economic importance of stock exchange?

4. What are the requirements of ready marketability?

5. What does the functioning of stock exchanges depend on?

6. Give a brief characteristic of the British Stock Exchange.

7. In what way do the duties of brokers differ from these of jobbers?

8. What is the volume of transaction concluded on the British Stock Exchange yearly?

9. What do share indices indicate and how are they constructed?

10. Where can you find index numbers?

11. What information do the Financial Times Stock Indices include?

6. Explain the following expressions:

a stock exchange financial intermediary, an agent, a stock-broker, an index number, savings and investments, ready marketability, reputable borrowers and institutions, an odd lot broker, the volume of transactions.

7. Choose the word or phrase in brackets that would best substitute for the word or phrase in bold print in the following sentences.

1. The economic importance of stock exchanges is that they facilitate saving and investment.

(prominence, significance, necessity), (bumper, make difficult, make easy)

2. Stock exchanges facilitate investment through channeling savings into productive investments.

(controlling, directing, handling), (profitable, industrious, industrial)

3. There should be both a legal framework and market rules to prevent fraud and sharp practice.

(set of laws, body of law, arm of the law), (danger, swindling, haste),

(trickery, gesticulation, turmoil)

4. Business at stock exchanges is conducted entirely by word of mouth.

(strictly, completely, originally)

(orally, willingly, usually)

5. There are no official statistics of the volume of concluded transactions at the London Stock Exchange.

(printed, public, trustworthy), (quantity, quality, size)

6. Prices at the exchange are widely available in the press.

(noticeable, obtainable, profitable)

7. The indices are constructed by taking a selection of shares and "weighing" the percentage changes in prices together.

(choice, range, sample), (comparing, calculating, evaluating)

8. The percentage changes in prices indicate aggregate movement in share prices.

(guide, predict, denote), (total, complete, expected)

9. The equities included in the series account for 60 per cent of the value of all quoted equities.

(explain, amount to, include), (exemplified, listed, announced)

10. The 500 share index consists of equities broken down into capital goods, consumer goods etc.

(measures, defines, includes), (determined as, subdivided, arranged)

8. Choose the right answer.

1. The principal stock exchange in the United States of America is known as:

a) the Stock Exchange, b) Wall Street.

2. Ready marketability requires that new issues should be made or backed by:

1. reputable borrowers or institutions, b) law and financial intermediaries such as the issuing houses.

3. Jobbers:

1. act as agents for the public, b) deal only with brokers and not with the general public.

4. Jobbers and brokers:

1. are obliged to keep records of concluded bargains, b) are not obliged to record concluded transactions.

5. Share indices indicate:

a) percentage changes in the market value of shares as compared with their value in the base years of the index, b) percentage changes in share prices within the last three years.

6. Price indices and averages published in the Financial Times Actuaries Share Indices are based on:

a) fixed-interest stocks, b) equities and fixed interest stocks.

7. Financial Times Actuaries Share Indices provide for fixed-interest securities:

1. prices and yields, b) price indices, average earning and dividend yields.

8. The financial group of equities is broken down into:

1. capital goods, consumer goods, industry, b) sectors, e.g. banks, discount houses etc.