Business English - Market Leader Intermediate (page 55)

Read the text in the box and answer the question below:

What's a bond in Portuguese?

• Título de renda fixa.

• Ação na bolsa.

Read the text in the green box and answer the question below:

In Portuguese, "principal value" or "face value" is the same as "valor nominal" or "valor de face". Anyway, what do they mean in practice?

• It's the amount invested in the bond, which will be paid back at a certain time in the future.

• It's the amount of interests that the investor will collect from the debtholder in the future.

Read the text in the pink box and answer the questions?

"Coupon rate" is "taxa de cupom" in Portuguese, but what does it mean in practice?

• Coupon rate is the interest rate paid to the bondholder (the investor) by the issuer (the debtholder) annually.

• Coupon rate is the final amount of money that the investor (the bondholder) will receive on the bond's maturity date.

Read the blue box and answer the question below:

What's "maturity date" in Portuguese and what does it mean in practice?

• Data de vencimento in Portuguese.

  This is the date when the investor is paid back the amount of money he invested when he first issued the bond.

• Data de vencimento in Portuguese.

  This is the date when the coupon rate (the accumulated anual interests) are paid to the issuer of the bond (the investor).

Read the text in the red box and answer the question.

What's a good word for "yield" in Portuguese?

• Rendimento.

• Perdas.

Read the text in the purple box and answer the question below:

What's credit rating and what role does it play in the bond market?

• Credit rating stands for "avaliação de crédito" in Portuguese. It's done by experts who estimate how risky or trustworthy for the bondholder (the investor) a bond will be.

• Credit rating stands for "avaliação de crédito" in Portuguese. It's done by experts who classify a bondholder (the investor) as a good investor or not.

Read the text in the blue box and answer the following question:

Mark all the sentences that make sense according to the text in the box.

ALL THE CORRECT OPTIONS MUST BE CHOSEN.

• It's a kind of loan taken out by governments or corporations from an investor with available capital.

• It's the amount of money owed to the government or to financial corporations by a "natural person" (pessoa física).

• Bonds are a widely used capital-raising strategy by companies and governments to raise sufficient funds for their projects.

Read the text in the gray box and answer the question below:

What statement below reasonably reflects what you've just read in the gray box?

• If interest rates rise after you've bought a bond, your bond will be paying you less than the new bonds issued from that moment on. Your bond wil become less valuable than the new ones.

• If interest rates rise after you've bought a bond, you'll be making more money on it. There is no risk in this kind of fluctuation.

Read the text in the green box and answer the question below:

What options below reflect what the text says about both "liquidity" and "bid-ask spreads?"

• Liquidity refers to how easy it is to buy or sell a bond in the market.

• Bid-ask spreads refer to the difference between how much the buyer is willing to pay and the seller is willing to receive for a particular bond.

• Liquidity refers to the ammount of money an investor will receive for a bond interests.

• Bid-ask spreads refer to how much the buyer paid for the bond and how much he'll get back.

Read the text in the pink box and answer the question below:

Considering that "hedge fund" means "fundo de cobertura" in Portuguese and having read the text in the purple box, which of the following is THE ONLY WRONG OPTION?

• These funds are invested according to events affecting companies, such as mergers, acquisitions, restructurings, or bankruptcies. Managers try to anticipate stock price changes resulting from these events.

• These funds are invested in debt securities of financially distressed companies. They aim to profit from the recovery of these securities as the financial situation of the company improves.

• These funds seek to profit from the appreciation of some stocks and the depreciation of others. In other words, these funds speculate in the stock market.

• These funds can be easily invested by an individual natural person (pessoa física) and they are usually seen as long-term, safe investment.