Curs de Limbi Moderne Aplicate in Domeniul Afacerilor

SUPORT CURS 2005/2006

CURS DE LIMBI MODERNE APLICATE ÎN DOMENIUL AFACERILOR

LIMBA ENGLEZA

ANUL II

LIMBA ENGLEZĂTitular Lector Dr. Mariana Toma

CONTENTS

Forward

Unit one. Marketing

Unit two. Advertising

Unit three. Finance

Unit four. Banking

Unit five. Insurance

Unit six. International Trade

Answer Key

Bibliography

- 3 -3

Forward

The present material is a useful tool, both for class study and

for individual study, for business students preparing for their

second year final exam, or for the final examination at the end

of their academic studies.

The six theme-based units consist of reading and vocabulary tasks

built on business authentic on-line publications .

The types of exercises are:

I. Reading Comprehension

a text accompanied by four/option multiple choice items. The

stem of a multiple choice item may be in the form of a

question or an incomplete sentence.

a gapped text with six sentence-length gaps. The correct

sentence must be identified in order to fill each gap from a

set of eight sentences marked A-H. One sentence is an

example and one other sentence is a distractor which does

not fit any of the gaps.

a text accompanied by true-false multiple choice items. The

stem is generally a statement.

a gapped text followed by sub-headings. The correct sub-

heading must be identified, according to meaning.

- 4 -4

II. Vocabulary Practice

a lexical cloze: a gapped text with 10-15 four-option

multiple choice items, most of which test vocabulary.

a structural (open) cloze: a gapped text in which one word

has to be supplied in order to fill each gap.

an error-correction or proof-reading task based on a text,

with 10-15 items. In most lines of the text there is either

an extra word that shouldn’t be there, or there is a

spelling or grammar mistake, which should be identified and

deleted. There are, nevertheless, lines which contain no

error.

a word-formation task, based on a text with 10-15 gaps.

Prompts are given for each gap and the correct form of the

word must be supplied for each gap.

a matching exercise, based on a text with 10-15 gaps,

followed by the missing words in jumbled order. The

appropriate words must be given for each gap.

a matching exercise, in which two list of words are given,

and each word in the first column must be matched with a

word from the second column in order to form suitable

collocations, followed by a gapped text, in which the

collocations found above have to be inserted.

a matching exercise, in which two lists are given, one with

words and phrases, whereas in the second column are to be

found their definitions. Each word and phrase have to be

matched to their corresponding definition.

a matching exercise, based on a text, followed by a list of

synonyms to some of the words in the text.

- 5 -5

a matching exercise, based on a text, followed by a list of

antonyms to some of the words in the text.

Students may evaluate themselves by checking the answer key at

the end of the course.

- 6 -6

how to complain effectively at your hotel:

I. READING COMPREHENSION

1. Read the following text about the selling process:

Steps in the Selling Process

Deciding on the best way to organise your sales force means thatyou need to consider the people that make up that sales force andhow they should be selected and trained. Most sales trainingtakes place on the job or within the company, teaching thestandard sequence of the seven steps of the selling process.

1. ______________ The salesperson must identify qualifiedpotential customers. The salesperson often has to approachmany prospects in order to get a few sales. Therefore, goodsalespeople would know how to qualify leads, that is screenout poor leads, and identify good leads by looking at theirfinancial ability, volume of business, special needs,location and growth prospects.

2. ______________ The salesperson should "do his/her homework"before approaching the prospect. He/she should learn as muchas possible about the prospect's company, and the buyers.The salesperson should set call objectives, and decide onthe best approach (visit, call, or letter) and right timing.

3. ______________ The salesperson needs to get the relationshipoff to a good start, followed by asking questions aboutcustomer's needs or the display of the product (or sample)to attract the buyer's interest.

4. ______________ Here, the salesperson presents the product,it's features, and benefits it represents to the buyer.Salespeople can use three styles of sales approach: cannedapproach (memorised talk), formula approach (identifiesbuyer needs, then moves into formula presentation), or need-

- 7 -7

UNIT ONEMARKETING

satisfaction approach (search for customer needs, thenexplain how product meets their needs).

5. ______________ The salesperson should seek out, clarify andovercome any objections buyers may have for buying theproduct.

6. ______________ Many salespeople lack confidence, feel guiltyabout asking for an order, or do not recognise the rightmoment for closing the sale.

7. ______________ This final step is a key different betweenselling the sales-oriented way, and selling the marketing-oriented (or customer-oriented) way. The follow-up ensurescustomer satisfaction and repeat business. This shows thechange in selling approaches to a greater focus on thecustomer, rather than traditional focus on the sale itself.

(http:// www.buseco.monash.edu.au)

2. Fill in the gaps in the text above with the following sub-headings:

a. Preapproach

b. Handling objections

c. Presentation and demonstration

d. Approach

e. Prospecting and qualifying

f. Follow-up

g. Closing

3. Read the following text about marketing planning:Your 7 Step, One-Day Marketing Plan

You don’t have to kill a tree to create an effective marketingplan. In fact, you can create a

- 8 -8

successful plan for your business in just one day. To begin,don’t worry about writing style or making your plan fancy. Justgo get a pencil and paper and let’s get started.Step 1 - Understand Your Market and CompetitionA big mistake that many business owners make is to latch on to acool product or service without first understanding the marketand what it wants (not what it needs). If you try to sellsomething that people don’t want, they won’t buy it.

A profitable market consists of people who have dire wants thatare being unmet, so much so that they will jump to buy yoursolution (product or service). A profitable market can becompared to a lake with thousands of starving fish. All you needto do is throw in the bate and it turns into a feeding frenzy.

To get an understanding of your market you should ask yourselfquestions like: are there segments in my market that are beingunderserved; are the segments of my market for my product orservice big enough to make money; how much share of that marketdo I need to capture, to just break even; is there too muchcompetition in the segment of my market to be competitive; whatare the weaknesses in my competition’s offering that I cancapitalize on; does my market want or value my unique competitiveoffering?

Step 2 - Understand Your CustomerKnowing your customer intimately is the first step to easy sales.Until you know (1) who your customers are, (2) what they want,and (3) what motivates them to buy, you can't prepare aneffective marketing plan.

Don’t confuse "wants" with "needs." People don’t necessarily buywhat they need, buy they’ll most always buy what they want. Forinstance, have you ever known someone that went to the store tobuy a pair of pants that they needed and came back with a newshirt, sweater, and shoes? Or how about the everyday shopper whogoes into the supermarket to buy some milk and eggs and comes outwith a frozen pizza, cheese cake, and other goodies.

People will buy what they want (even if they don’t have themoney!), not what they need. And yes, this even applies to those"sophisticated" corporate honchos (I used to be one, I shouldknow).

- 9 -9

To really get to know your customers you’ll need to ask yourselfquestions such as: how does my potential customer normally buysimilar products (i.e. in a store, on the web, door-to-door); whois the primary buyer and the primary buying influencer in thepurchasing process (i.e. husband or wife, purchasing agent,project leader, secretary); what kind of habits does my customerhave-for instance, where do they get their information (i.e.television, newspapers, magazines); what are my target customer’sprimary motivations for buying (i.e. look good, avoid pain, getrich, be healthy, be popular etc.)

Step 3 - Pick a NicheIf you say that your target customer is "everybody" then nobodywill be your customer. The marketplace is jam packed withcompetition. You’ll have more success jumping up and down in asmall puddle than a big ocean. Carve out a specific niche anddominate that niche, then you might consider moving on to asecond niche (but not before you’ve dominated the first one!). You could be a "lawyer that specializes in child accidentliability" or a "C.P.A. for used car dealers" or a "dry cleanerfor the Heritage Park subdivision in West Oaks, CA." You get thepicture. Make sure to choose a niche that interests you and thatis easy to contact. I can’t stress this point enough. There’snothing more destructive than to pick a niche that you can’tcommunicate with or that costs you a ton of money to contact. Step 4 - Develop Your Marketing MessageYou marketing message not only tells your prospect what you do,but persuades them to become your customer. You should developtwo types of marketing messages. Your first marketing messageshould be short and to the point. Some may call this yourelevator speech or your audio logo. It’s your response to someonewho asks you, "So, what do you do?"

The second type is your complete marketing message that will beincluded in all your marketing materials and promotions. To makeyour marketing message compelling and persuasive it shouldinclude the following elements: an explanation of your targetprospect’s problem; proof that the problem is so important thatit should be solved now, without delay; an explanation about whyyou are the only person/business that can solve your prospectsproblem; an explanation of the benefits people will receive fromusing your solution; examples and testimonials from customers you

- 10 -10

have helped with similar problems; an explanation about prices,fees, and payment terms; your unconditional guarantee.

Step 5 - Determine Your Marketing Medium(s)Remember, when I said that it’s critical to choose a niche that you can easily contact? When you go to choose your marketing medium(s) you’ll understand why that was sound advice.

Your marketing medium is the communication vehicle you use todeliver your marketing message. It’s important to choose amarketing medium that gives you the highest return on yourmarketing dollar (ROMD). This means that you want to choose themedium that delivers your marketing message to the most nicheprospects at the lowest possible cost.

The following is a smattering of tools you have at your disposalto get your message out: newspaper ads, posters, contests,seminars; television ads, signs, sweepstakes, door-to-door,teleclasses; radio ads, banners, trade shows, yellow pages,articles; classified ads, newsletter, charity events,networking , infomercials; billboards, take-one box,telemarketing, magazine ads, special events; sales letters,flyers, email, movie ads, postcards, doorhangers, agents, mediareleases, fax broadcasts; brochures, Gift Certificates, word-of-mouth, website, sign picketing; business cards, catalogs, AirBlimps, public speaking, window display.

The trick is to match your message to your market using the rightmedium. It would do you no good to advertise your retirementcommunity using a fast-paced, loud radio spot on a hip-hop radiostation. This is a complete mismatch of the market, message, andmedium.

Step 6 - Set Sales and Marketing Goals Goals are critical to your success. A "wish" is a goal thathasn’t been written down. If you haven’t written your goals,you’re still just wishing for success. When creating your goalsuse the SMART formula. Ensure that your goals are, (1) Sensible,(2) Measurable, (3) Achievable, (4) Realistic, and (5) Timespecific.

Your goals should include financial elements such as annual salesrevenue, gross profit, sales per sales person etc. However, they

- 11 -11

should also include non-financial elements such as units sold,contracts signed, clients acquired, articles published etc. Onceyou’ve set your goals, implement processes to internalize themwith all team members such as reviewing them in sales meetings,displaying thermometer posters, awarding achievement prizes etc.

Step 7 - Develop Your Marketing BudgetYour marketing budget can be developed several ways depending onwhether you want to be more exact or develop just a quick-and-dirty number. It’s good to start out with a quick-and-dirtycalculation and then to support it with further details.

First, if you have been in business for over a year and trackedyour marketing-related expenditures you could easily calculateyour "cost to acquire one customer" or "cost to sell one product"by dividing your annual sales and marketing costs by the numberof units (or customers acquired) sold.

The next step is to take your cost to sell one unit or acquireone customer and simply multiply it by your unit sales orcustomer acquisition goal. The result of this simple computationwill give you a rough estimate of what you need to invest to meetyour sales goals for the next year.

ConclusionThere you have it, The Seven-Step, One-Day Marketing Plan. It’ssimple really. Of course you’ll need to study up a bit more aboutyour marketing medium(s) of choice, their appropriateness foryour message, and their associated costs. But try not to make thedevelopment of your plan a laborious, drawn-out task. Rememberthe 80-20 rule. 80% of your results will come from 20% of youreffort.

My final word of advice is to make sure you set asideuninterrupted time to develop your marketing plan. It could verywell be the most important document to which you and your teammembers will ever refer.

(http://www.business-authority.com/sales_marketing)

4. Decide whether the statements below are true or false according to the text you have read:

- 12 -12

1. A profitable market is the fish market. T / F

2. ‘Wants’ and ‘needs’ are one and the same thing.T / F

3. Being selective can help you do good in business.T / F

4. Your marketing message should by no means be blunt and stark. T / F

5. The more you pay for the delivery of your marketing message via a marketing medium, the higher your return on your marketing dollar will be. T / F

6. Making general estimates concerning profitable investments will help you meet your financial exigencies.

T / F

II. VOCABULARY PRACTICE

The Marketing Research Process and itsFour Steps

(i) Defining the problem and research objectives.The first activity of any marketing research process is definingthe problem and 1 ……………. research objectives. This sounds verysimple but many research problems 2 ………..….. wrong becausepeople do not clearly decide what information they need from theresearch that they will commission. Before you begin any externalresearch you should make sure that the information does notalready exist. For example, many organisations collect extensivedata in different areas of the company that other parts of thecompany may 3 ……………. . Often academics or the Government Printerpublish useful information. Trade or other business associationsmay also have information. 4 ……………. defining the problem, themarketing manager also has to state the project's researchobjective(s), whether it is to be an exploratory, descriptive or causalstudy. The definition of the problem and research objectives is

- 13 -13

an important step in marketing research as it is the hardest stepin the marketing research process, and 5 …….……. the entireprocess 6 ……………. (ii) Developing the research plan. Specific information needs must be determined according to thestated research objectives. Information collected can be eithersecondary or primary data. Secondary data is data that alreadyexists, e.g. journals, magazines, reports. Primary data is datacollected for your specific purpose, e.g. by distributing 7…………... . Researchers would normally exhaust secondary datasources before 8 ……………. with primary data collection. The timeand cost required for secondary data collection is less, and itis often useful as a starting point in research, as well as inassisting in the definition of the problem and researchobjectives. In certain situations, secondary data may besufficient to meet the researcher's information needs. However,if the researcher cannot obtain the needed information fromexisting secondary data sources, then primary data collectionwill be required. There are several 9 ………..…. to be considered in primary datacollection: research approaches, contact methods, sampling planand research instruments. The three main approaches towards the collection of primary dataare: observational, survey and experimental. The observational approach(e.g. observing shoppers' behaviour in a supermarket) is bestsuited to meet exploratory research objectives; the surveyapproach (e.g. telephone interviews) which is the most commonmethod of primary data collection is best 10 ……………….… to meetdescriptive research objectives; and the experimental approach(e.g. taste tests for a new product) is best suited to meetcausal research objectives. There are many different approaches that you could take tocollecting information: mail, telephone, email or personal (face-to-face).Each of these techniques has its own strengths and 11 ………..……..and you should be aware of them when you commission any research.(iii) Implementing the research plan. If you plan to ask an external agency to conduct the research youneed to ensure that you provide the agency with a proper 12 ………….…. showing in detail what information you require. You shouldmake sure that the research agency is aware of all theinformation that you already have so that you do not 13 …..……….money finding out things that you already know. (iv) Interpreting and reporting the findings.

- 14 -14

The interpretation of results is an important step in themarketing research process. Interpretation should be 14 …………..…..not only by the researcher, but also the marketing manager. Thebest research is 15 ………….…. if the interpretations are incorrect.

(http:// www.buseco.monash.edu.au)1. Fill in the gaps in the text above with the missing words:

a) henceforth

b) weaknesses

c) apart from

d) conducted

e) issues

f) setting

g) guides

h) questionnaires

i) brief

j) useless

k) go

l) waste

m) commencing

n) suited

o) not be aware of

2. Choose the best word from below to fill each gap:Price Elasticity and Pricing Policy (Penetration or Skimming)The most obvious thing about the level of sales revenue to a firmis that they want more and more of it! The problem that mostfirms therefore come up 1. ____________ is then how do you getmore of it? The 2. ___________ answer at this point is to sellmore of your product, and that is absolutely right - but how doyou?Price Elasticity of DemandObviously marketing has a key role to play in this process, but avital part of a firm's market strategy has to be the price they3. _______________ for their product. Will it be best for them tocut their price to get more revenue, or to 4. ______________their price??? The answer to this lies 5. ____________ the priceelasticity of demand.

PRICE ELASTICITY OF DEMAND=

% change in demand

% change in price

- 15 -15

If the firm cuts its price by 10%, and the demand for theirproduct increases by 20%, then the price elasticity of demandwill be 2. We call the demand for this product ELASTIC. Thisfigure 6. _____________ means that the increase in demand wasdouble the decrease in price. In this situation you would clearlywant to cut your price as cutting it has 7. _______________ a lotmore business, and so although you're getting less money for eachone you sell, you're selling plenty more to 8. ______________ forit.However, say that when the firm cut its price the same amount(10%), the demand for their product only went up by 5%. Thiswould mean that the price elasticity of demand was only ½. Wecall the demand for this product INELASTIC. The figure this timemeans that the increase in demand was only half the change inprice. Here the firm would not choose to cut price 9.____________ their competitors had) as they would 10 __________out. They would be selling a few more, but not enough to make upfor the fall in price and their sales revenue would go down.Market Skimming / PenetrationHowever, the firm also need to consider other aspects of theirpricing - do they want to aim for a large market share with a lowprice? In this case they would want to consider marketpenetration as a pricing strategy. This would mean 11.____________ a low price (and correspondingly lower profit 12.___________ on each unit), but selling a higher volume. Thisdepends considerably on whether the product is elastic in demand(see above). 13 ____________ they may want to remain as a nichemarket product and set a high price (with a higher profit marginon each one sold) - this is known as market skimming. Both ofthese will have major 14 ____________ for both their salesrevenue and their 15 __________ of profit. Remember that highsales revenue does not necessarily mean high profit.

(http://www.bized.ac.uk/dataserv/extel/notes/srev-th.htm)

1. a) against b) on c) withd) to

2. a) tough b) vulgar c) crassd) base

3. a) suggest b) recommend c) prescribed) charge

4. a) develop b) increase c) growd) deepen

- 16 -16

5. a) beside b) near c) withd) in

6. a) literary b) latterly c) literallyd) lightly

7. a) generated b) invented c) maded) created

8. a) make off b) make up c) make outd) make over

9. a) unless b) except c) if d)whether10. a) loose b) loosen c) loss

d) lose11. a) price b) prize c) premium

d) perk12. a) border b) edge c) margin

d) line13. a) alternating b) alternatively c) altering

d) altogether14. a) implications b) inferences c) indications

d) involvements15. a) altitude b) height c) horizon d)level

3. Read the text below about selling techniques insupermarkets. In most of the lines 1-14 there is one extraword. It is either grammatically incorrect or does not fitin with the meaning of the text. Some lines, however, arecorrect. If a line is correct, write CORRECT against thecorresponding number; if there is an extra word in the line,write the extra word in CAPITAL LETTERS against thecorresponding number on your answer sheet. E.g. 0 – CORRECT;00 – MUCH

000 1

Selling TechniquesOnce they have us inside the shop or complex all sorts ofselling techniques can be applied. We become much vulnerable topiggy-back selling, product line pricing, optional productpricing, captive product pricing, product bundle pricing,promotional pricing, geographic pricing, value pricing andvarious tricks used in positioning products. This last pointincludes leading us passed associated product ranges,

- 17 -17

2 3 4 5 6 7 8 91011121314

changing the location of high selling lines so as we wander intonew areas of the shop, or simply folding clothes so that ourtactile senses are awakened when we touch them. Yes, there is alot of business theory in just a simple visiting to asupermarket. Economics can't be ignored neither. Think for amoment where efficiencies fit into all of this. Retailers aimfor all off the efficiencies we cover. An example of one is thedelivery of fast moving products by pallet. The pallet mustarrive at the correct time and be loaded on the correct order.Then all that happens is that is it transferred in one movementfrom the delivery lorry of the individual supplier to thedelivery lorry of one supermarket. When the latter reaches thestore it simply drops the load that is for that particularbrunch. Literally, the box has not been touched by human handand costs have been cut, so allowing margins to be increased.Retailers has to be aware of the oligopoly in which they operateand how they maintain market share, barriers to entry andproduct differentiation.

(http://www.bized.ac.uk/dataserv/extel/notes/srev-th.htm)

4. MARKETA. Word-Formation. Fill in the gaps with the corresponding forms of the word market:

1. The first step in developing a ___________ strategy is to understand your customers, enablingreaction to their changing needs and the changing dynamics of the ___________.

2. A good way to think of the favourable position in the mind of the consumer that ___________ aretrying to influence is to consider what can be termed the 'perceptual or mental ladder.

3. We __________ goods and services for a special Sunday dinner.

4. These decisions in _____________ organisations are made in the first place at the business level ofstrategy.

5. However, corporate objectives may simply represent the wishes of top management rather thanreflecting ___________ reality.

6. These positions were plotted on two main dimensions: business strength and __________attractiveness.

- 18 -18

7. __________ segmentation can be thought of as a process where the market is broken up into smallermore defined ____________.

8. The second point highlights that segmentation is a necessary pre-requisite for target ____________

.B. Collocations. Match the noun marketing with the following words to formmeaningful collocations: management, target, societal, manager, strategy, corporate,research, aggressive, concept, confusion.

_______________ marketing

_______________ _______________ _______________

_______________

marketing _______________

_______________ _______________ _______________

______________

C. Fill-in-the-gaps. Now fill in the gaps below with thecollocations you found above :

1. However, if the _________ _________ is accepted as a guiding philosophy these conflicts can often beresolved.

2. In developing their functional strategy, marketers undertake the __________ __________ process.

3. Adopt an _________ _________ posture, namely selling, advertising, pricing, etc.

4. _________ _________ takes into account society's well-being.

5. Essentially, this process is undertaken in a formal sense when the __________ _________ develops themarketing plan.

6. The producers will try non-price tactics and might even introduce some __________ __________ to makeus unsure of what the exact purchase price is.

7. _________ _________ usually involves formal studies that are undertaken to solve a particular problem.

- 19 -19

8. Companies need to develop ethics of _________ _________ to ensure all their employees act in amanner which is considered moral.

9. Before a firm implements its _________ _________ it should determine targets (segments) and thenselect and act on those which offer the greatest opportunity for long term profit potential.

10. The second point highlights that segmentation is a necessary pre-requisite for __________ __________.

5. Collocations. Part one.

A. Match the words in the two columns below to form suitable collocations:

1. strategic

2. buying

3. distribution

4. direct

5. quality

6. disposable

7. consumer

8. active

9. basic

10. business

a) research

b) behaviour

c) buyer

d) channel

e) planning

f) marketing

g) income

h) strength

i) intent

j) control

B. Now match the collocations you found above with theircorresponding definitions:1. ____________________ the process of developing and maintaininga strategic fit between the organisations goals and capabilitiesand its changing marketing opportunities.

2. __________________ refers to the size, growth, sharepositioning, margins, technology position, strengths/weaknesses,image, environmental record and people of the organisation.

- 20 -20

3. _____________________ customer whose latest purchase was madewithin the last 12 months.

4. _____________________ research aimed at expanding knowledgerather than solving a specific, pragmatic problem.

5. _____________________ a scale used to measure the likelihoodthat the respondent will purchase a product.

6. _______________________an ongoing analysis of operations, toverify goods or service meet specified standards, or to betteranswer customer/user complaints.

7. _____________________ the amount of money available to personsfor spending or saving after taxes have been deducted. Also knownas discretionary income.

8. ______________________ marketing efforts, in total directedtoward a specific targeted group--direct selling, direct mail,catalog or cable--for soliciting a response from customer.

9. _____________________ an organized network of agencies andinstitutions which in combination perform all the functionsrequired to link producers with end customers to accomplish themarketing task.

10. ____________________ the behavior of the consumer or decisionmaker in the market place of products and services. Library userbehavior is often captured in library literature under usestudies.

6. Collocations. Part two.A. Match the words in the two columns below to form suitable collocations:

1. self

2. marketing

3. shopping

4. convenience

a) demand

b) product

c) group

d) market

- 21 -21

5. market

6. consumer

7. focus

8. store

9. target

10. market

e) service

f) expenditure

g) mix

h) good

i) layout

j) areaB. Now match the collocations you found above with their corresponding definitions:

1. _____________________ the amount consumers spend on goods and services.

2. _____________________ a qualitative market research technique in which a group of participants (approx. 10) of common demographics, attitudes, or purchase patterns are led through a discussion of a particular topic by a trained moderator.

3. ______________________ a consumer good and/or service (such assoap, candy bar, and shoe shine) that is bought frequently, oftenon impulse, with little time effort spent on the buying process.

4. ______________________ the total volume of a product or service bought/used by a specific groups of customers/users in a specified market area during a specified period.

5. __________________ the blend of controllable variables that the firm/library uses to reach desired use/sales level in target market, including price, product, place and promotion- 4 P's.

6. _____________________the type of operation in which the customer/user is exposed to merchandise (browsing and self-selection) without assistance, unless customer/user seeks assistance.

7. _____________________ one that more time is spent selecting (browsing) than a quick convenience good.

- 22 -22

8. ____________________ the interior layout of the store/library for the ease of user movement through the store to provide maximum exposure of good and attractive display.

9. __________________ the particular segment of a total population on which the retailer focuses its merchandising expertise to satisfy that submarket in order to accomplish its profit objectives.

10. ____________________ a geographical area containing the customers/users of a particular firm/library for specific goods or services.

7. PRICEA. Decide which of the following verbs collocate with price:worked, collapsed, declined, dropped, drifted down, spread, slowed down, escalated,fell, fluctuated, jumped, kept/remained steady, faded, outstripped, plummeted, plunged,ranged from…to, survived, recovered, rose, shot up, varied, retailed, went through thefloor/roofB. Find below some phrasal verbs that can be used with PRICE. Match the verbs with their corresponding particles:

1. agree

2. arrive

3. force

4. haggle

5. mark

6. push

7. put

8. work

a) out

b) on/to

c) over

d) at

e) down/up

f) up

g) up

h) down8. BRANDMatch the following types of brand with the right definition.

1. brand equity

2. brand extension

a) the systematic and continuous processof building and sustaining the long-termcompetitive advantage of a brand.

b) feelings and opinions that a buyer

- 23 -23

3. brand management

4. brand personality

5. brand positioning

6. brand image

7. brand leader

8. brand loyalty

9. brand name

has about a particular named product

c) the net value the brand adds to aproduct; it’s measured by the customer’swillingness to buy in the future and pay apremium price; It is all about buildingenduring, profitable brand-customerrelationshipd) how we position our offerings in themind of the customer.

e) the outward expression of a brand as ifit were a person

f) a new product or service that is relatedto an existing brand but offers a differentbenefit and/or appeals to a differenttarget segment.

g) name of a particular product or group ofproducts, or a service that is recognisedby customers

h) willingness of a customer to keep buyingthe same named product or group of productsi) the best-selling product in aparticular category

9. Synonyms. Read the following text about corporate objectivesand find words which mean the following:

1. roughly

2. exigencies

3. upholding

4. functions

7. insufficient

8. discontented

9. lessening

10. inventiveness

- 24 -24

5. circumscribing

6. exhibiting

11. well-being

12. attainableCorporate ObjectivesObjectives are the end results to be achieved. In this contextthe term ‘corporate objectives’ has been used broadly to coverthe objectives for an organisation as a whole and for eachbusiness unit as a part of that whole.Performance objectives consist of the financial requirements forthe organisation and other key result areas, which are criticalfor the organisation’s short-term and long-term success. Theseinclude profitability, return on investment (ROI) return onassets (ROA), earnings per share (EPS), dividends and cash flow.They are usually determined on the basis of satisfying the needsof the stakeholders, which includes shareholders and others whomight have a ‘stake’ in the business such as management,employees, customers, suppliers and creditors. The driving forceunderpinning financial performance in the majority of cases isshareholder value. If the organisation performs well financially,share prices are maintained or increased. If financialperformance is below expectations, share prices drop, limitingthe organisation’s ability to attract equity financing tounderwrite future operations and growth while also exposing theorganisation to the danger of a takeover. Poor financialperformance, particularly cash flow, also limits anorganisation’s ability to attain debt financing (borrowing).However, the use of financial performance objectives alone is adangerous preoccupation for top management. Shareholder value can beenhanced in the short term by cost-reduction strategies such asdownsizing and the reduction of product quality. In the long term thismight cause customers to become dissatisfied with the organisation’sproducts or services, which in turn could lead to a loss ofmarket share, reduction of profitability and eventual decline inshare price.5 That is, a focus on short-term shareholder valuecan lead to the diminution of customer value with a resultantloss of competitive advantage and a decrease in long-termfinancial performance. In order to provide a broader perspectiveof the organisation’s direction a number of non-financialperformance objectives should be included as either corporate orbusiness objectives: improvement in innovativeness, improvementin operational efficiency, improvement in product quality,improvement in customer satisfaction, social responsibility andemployee welfare.

- 25 -25

All of these objectives can be translated into specific,achievable and measurable objectives. For example, the 3M Companysets a corporate performance objective based on innovationwhereby each business unit is expected to achieve 30 per cent ofits revenue from products introduced in the past four years.

(http://www.nelson.com.au/reed)


1. Read the following text about the impact of advertising on consumers:Advertising and the Mind of Consumersby MAX SUTHERLAND and ALICE SYLVESTERImage advertisingThe buying of cars, appliances, vacations and other high-priced items are examples of high-involvement decision- making. This high level of involvement contrasts with the low level brought tobear on the purchase of products like shampoo or soft drink or margarine.

The effect of image advertising is easier to see in relation to high-involvement products, so let us start with a high-involvement example — Volvo cars.

Between 1970 and 1990, Volvo focused its image advertising on safety. Through repetition, it built up a strong image for the Volvo as a safe car. On a scale of 1 to 10 for safety, most people would rate Volvo higher than almost any other car. 0……….

1.…………………. This is often not perceptible after just one exposure because the change, if it occurs, is too small for us to notice.

- 26 -26

UNIT TWO ADVERTISING

Now let’s take a low-involvement product category-hair spray — and examine its history of brand image advertising.

The first brands of hair spray originally fought for market shareon the basis of the attribute of ‘hair holding’. 2………………… To the extent that they all claimed the same thing, they were what we call ‘me-too’ brands.

To break out of this, one brand began to claim that it ‘holds hair longer’. Just as Volvo claimed that it was safer, and thereby moved Volvo up higher up the perceived safety scale, so this brand of hair spray made people aware that some brands of hair spray might hold hair longer than others. 3…………….….

4 .…………...….. The new brand claimed that it was ‘long holding’, but also that it ‘brushes out easier’ — a dual benefit. In doing so it successfully capitalized on the fact that hair sprays that hold longer are harder to brush out (or were until then). Many years later, came the attribute of ‘flexible hold’.

These examples of image advertising for hair spray and cars illustrate how one effect of advertising is to alter our perceptions of a brand. Advertising can marginally change our image of a brand by leading us to associate it with a particular attribute (like ‘longer holding’ or ‘brushes out easily’), and toassociate the brands in our minds with that attribute more than we associate it with any other competitive brand.

User imageIn advertising for Levi’s, Revlon, Coca-Cola, Calvin Klein, Dior or Gap, the focus is often on people who use the brand. What changes is not so much our perception, or image, of the product as our perception of the user-stereotype — the kind of person whotypically uses the brand, or the situation in which the brand is typically used. When these brands are advertised, the focus is very much on imagebut often with this important, subtle difference. The advertisingaims to change not how we see the brand itself-the brand image-but how we see:

the stereotypical user of the brand -the user image; the stereotypical situation in which the brand is used.

- 27 -27

If the user image of a brand resembles us, or the type of person we aspire to be, what happens when we come to buy that product category? The user image acts as a feather on one side of the beam balance. 5……………..… (but note, only if everything else is about equal).6………………... But they can nevertheless tilt the balance in favor ofone brand. Minor effects such as these constitute much of the impact of advertising. Yet they are usually much more difficult for us as consumers to analyze introspectively, and we tend to discount them because they clearly fall well short of persuasion.

(http://aef.com/channel.asp)2. Choose the best sentence from below to fill each of the gapsin the text above. E.g. 0 – C. Do not use any letter more than once. There is one extra sentence.A. The next brand of hair spray to enter the market, instead of tackling that brand head-on, cleverly avoided doing battle on ‘length of hold’.B. User, or situational, image changes usually fall short of thekinds of rational, heavyweight reasons that make perfect sense ofany choice.C. Safety is now an integral part of our perception of thisbrand.

D. One effect of image advertising, then, is to produce gradualshifts in our perceptions of a brand with regard to a particularattribute — in Volvo’s case, safety (in other words, to effectmarginal changes in our mental rating of the brand on thatattribute).E. That is, each brand claimed to hold hair. F. If everything else is equal it can tip the scale G. It then attempted to shift perception of itself on thisattribute and marginally increase the mental rating consumerswould give it on ‘length of hold’.H. Gauging the effects image advertising has on us is made evenmore complex because these effects may not operate directly onthe image of the brand itself.3. Read the following text about audience attention and distraction in advertising Attention and Distraction by HERBERT JACK ROTFELDA lot of advertising seems to get attention but do little to sella product. Many people think that if they have the audience's

- 28 -28

attention they have done the job. However, an attention-gettingdevice that is unrelated to the message will not attractreadership or viewers interested in what the advertiser has tosay. At best, the audience will remember the device and not themessage. This loss of focus on the audience and message makes fora lot of misdirected advertising.

In one of his advertising reviews for Advertising Age, Bob Garfieldonce noted that there are two things that could be done by a foolwith a lot of money: (1) run for president promoting somecrackpot idea, even though you have no charisma or intellectualappeal; or (2) mount an elaborate advertising campaign, featuringexpensive celebrities with no connection to your productwhatsoever. His point was that no one would ever be so foolish asto undertake the expensive and humiliating effort of the firstbut, amazingly, many business owners will quickly go after thelatter. "As we have said repeatedly, celebrities are seldom usedin support of an advertising idea; they're used in place of anadvertising idea."

This is not to say that celebrities should never be used inadvertising. Many decades ago, George Lois's ads for Maypo cerealhad to fight the product's image as something just for smallchildren. Since people saw it as something children would"outgrow," he used Mickey Mantle and other rugged sports heroes,crying "I want my Maypo." The star presenters' images were tiedto the message. Maureen O'Hara, whose movie star image includedher beautiful hair, appeared in advertising for Lustre-CremeShampoo. A more contemporary good use of a celebrity in marketingis when Olympic winners are on the Wheaties box, because thecereal is "the breakfast of champions." A movie or televisionactor whose media-generated image is of a demanding person who istrusted might be a useful consumer-trusted presenter for aninvestment firm.

Unfortunately, many celebrities are used in advertising in a waythat can only be a waste of money. In addition to the costs ofhiring a good actor to take a part, the star celebrity also costsa high-priced premium for his or her appearance. But if the imageof that star does not fit the advertising message, the audiencewill only recall the celebrity, not the product. In these cases,the advertising message costs more to make but does not improveits communications to the audience.

- 29 -29

Bill Cosby's talent with children probably helped communicate thefun message of various Jell-O products. However, featuringWilliam Bendix in advertising for the American Meat Institutefour decades ago probably did more to promote his televisionprogram, "The Life of Riley," than it did to encourage people toeat more meat. Michael Jordan's championship image is a good fitfor selling Gatorade or Nike shoes, but it is questionable as towhether his personal charm enhanced the images of MCI's long-distance service or McDonald's restaurants. Charles Barkleyprobably did not sell many Hyundais, though he certainlyincreased the cost of the advertising, and Chevy Chase did notenhance the appeal of Dollar Rent-a-Car.

Similarly, advertising that makes direct comparisons withcompeting brands also needs to take the consumers' mind set intoaccount. Just because the other brand is a better seller or morefamous does not mean that there is a value in making comparisons.A comparison advertisement is a good idea only if the comparedbrand is the target audience's standard for a quality product andthe advertising message would show a consumer-desired benefit forwhich your brand is better. Lots of comparison advertisingforgets this, using the better-selling brand for just theattention getting value, and having an audience that remembersonly the competitor.

Entertainment values or outright humor can help a sellingmessage. Federal Express' jokingly made strong illustrations ofhow deliveries "absolutely, positively have to be thereovernight," turning the company into an icon of the reliableovernight delivery business. More commonly, irrelevant humor getslarge numbers of people to watch the commercials or read the ads,but fails to encourage those people to buy the products or go tothe stores. Audiences remember the joke, or the entertaining ad,but all too often they don't remember the sponsor or theadvertised reasons given for them to become customers. As wasrepeatedly observed on numerous business news programs, thesometimes entertaining Internet company commercials on the 2000Super Bowl, which cost millions of dollars per spot, did notgenerate an upswing in visitors to the sponsors' Web sites.

(http://aef.com/channel.asp)4. Read the following statements and decide whether they are trueor false, according to the text above:

- 30 -30

1. By catching the audience’s attention the advertiser is sure to always accomplish onlysuccessful advertising.

T/F2. Well-known stars are not too often used to endorse an

advertising idea. T/F

3. Sometimes there is much more to the profession of actors than acting. T/F

4. The costs of hiring star celebrities are always paid for by the impact of the ad on the public.

T/F

5. Consumers will not go for the competitor’s brand if your brand is high standard. T/F

6. A good joke is a good joke, but sometimes that’s all it stands for. T/F

5. Read the following text about advertising tips:

Advertising Tipsby ELLIOTT BLACK

1. _________________ Research shows that it takes a minimum of three impacts to get any kind of recall for print advertising andfive impacts for the prospect to take any type of action. One ad will not cut it. Repetition is essential. 2. _________________ Make certain the advertising medium used is the right one to reach your target. Advertise in several complementary mediums to expand your effectiveness. Explore otheroptions such as theatre playbills, post card decks, billboards, direct mail, etc. 3. _________________ Do the unusual to get noticed. Advertise in a different section than your competition. Avoid the holiday advertising traffic jams. Include a special offer. Be creative with your message and graphics.

4. ________________ If at all possible, make the advertisementpro-active to get the reader/listener involved. A special offer can be a good inducement for response.

- 31 -31

5. ________________ Construct the program to be end-user friendly. Minimise the steps necessary to respond. 6. _______________ Monitor the effectiveness of your advertising campaign. Track each media and each response to determine what seems to work and what doesn't. Do not over-react but set limits and make changes as necessary. 7. ________________ Deadlines for advertising occur with alarmingfrequency and, in most cases, far ahead of publication/air dates.Decide what your objectives are and put your plan in motion. It is best to write the Marketing Communication Plan down and not tojust trust it to memory. It will also give you an opportunity to review it for consistency.

(http://www.embainc.com/articles/ad_tips.html)

6. Fill in the gaps above with the following sub-headings:a. Call for action

b. Plan early and often

c. Frequency is the key

d. Track your results

e. Make the response easy

f. Expand your reach

g. Cut through the clutter

7. Read the following text about misleading mailings:

Beware of Promises of Riches from Abroad "Your name has come out as a winner!" "You have beenidentified as the sole and rightful recipient of £[insertfigure in thousands]". "Dear XXX. Your right to winnings of £[insert figure in thousands] is hereby confirmed as fullyeligible and pending".

It's every person's wish come true. You receive a mailinginforming that you have won a large amount of money. Ideas ofwhat you can do with it, immediately pop into your head.

- 32 -32

Holidays, cars, home improvements. Then you get to the bottomof your "winning notification letter" and you're asked to sendoff a fee to claim your winnings. And to boot, you find outthat you're not, as you had initially believed the winner ofthe top prize, instead, you just have the right to enter aprize draw.

Does this scenario sound familiar? To hundreds, perhaps,thousands of you, it probably does. The Advertising StandardsAuthority (ASA), which is the body responsible for supervisingthe content of mailings (as well as other non-broadcastadvertising), says that it receives hundreds of complaints ayear about prize draw mailings; last year 7% of all thecomplaints that the ASA received (913 out of a total of13,959) were from people who had been misled by mailings thatthey believed told them they had won thousands of pounds. Thereality is that the ASA has never heard of anyone who has wonmoney as a result of returning one of these mailings.

Two of the biggest culprits for sending out problematic prizedraw mailings in the UK over the last year or so have beenFriedrich Mueller and TV Direct Distribution, both of whichare based overseas. Despite efforts by the ASA, in conjunctionwith its European counterparts and Royal Mail, to stop thesecompanies from sending out misleading information, thecomplaints about their mailings have continued to pour in. TheASA has, therefore, decided to impose its ultimate sanctionupon these companies and has asked the Office of Fair Trading(OFT) to consider taking action against the companies underthe Control of Misleading Advertising Regulations. FriedrichMueller and TV Direct Distribution now run the risk ofprosecution, which could result in a hefty fine.

Friedrich Mueller and TV Direct Distribution are operators inone of the most difficult areas that the ASA polices -overseas mailings. It is often the case that the mostproblematic mailings that the ASA sees originate from abroadand it is much harder for the UK regulatory bodies to stop thedistribution of mailings that originate from outside of theUK. The ASA works with Royal Mail and the OFT to try to stopthese mailings in the UK. When the ASA encounters anadvertiser who refuses to withdraw a problematic mailing, itasks Royal Mail to assist it in getting the mailing stopped.

- 33 -33

As an ultimate action, the ASA refers problematic advertisersto the OFT who can then take action in the courts.

The ASA also works with its European equivalents, through anorganisation called the European Advertising StandardsAlliance, to stop misleading mailings being sent from theircountry of origin.

However, the regulators need you to help them in their questto stop these mailings. What can you do? Well, the next timethat a letter arrives through your door promising you richesfor a small "administration fee", follow the ASA's advice andbin it.

(http://www.asa.org.uk/index.asp)

8. Choose the correct answer to the following questions:1. The "winning notification letter" you receive…

a) informs you about the legal rights you have concerning a certain amount of money.

b) denies the fact that you have become rich overnight.

c) gives you advice regarding the windfall.

d) encourages you to claim your winnings.

2. The Advertising Standards Authority (ASA) is responsible…

a) for the delivery of prize draw mailings.b) for the supervision of non-broadcast advertising.

c) for the issuing of mailing authorisations.

d) for the hundreds of complaints about mailings.

3. The ASA decided to impose its ultimate sanction upon the culprit companies…

a) because the complaints from overseas outnumbered those in Europe.

b) because the Control of Misleading Advertising Regulations imposed it.

- 34 -34

c) as a result of the fact that the recipients of misleading information did not cease complaining.

d) because its European counterparts and Royal Mint requested it.

4. In order to stop the penetration of such mailings into the UK the ASA…

a) will work hand in hand with the police.b) can stop the distribution of mailings coming from

abroad.

c) will assist the Royal Mint in its enterprises.

d) will have the culprits taken to court.

5. These mailings can be stopped if you…

a) pay the small administration fee requested.b) totally ignore them.

c) follow a certain course of action.

d) keep your door closed.


1. Match the following advertising-related words and expressions with their corresponding definitions1. bait-and-switch2. consumerism

3. commercial 4. jingle

5. hard sell 6. puffery7. sales promotion

a) to urge the purchase or use of a product

b) a person or organisation who providesmoney for a certain event, research, education, etc. to gain publicity andpublic approval

c) a person who invents or uses slogans

d) an indirect, subtle, and relaxed style of advertising or selling

- 35 -35

8. publicity

9. skywriting

10. sloganeer

11. soft sell12. sponsor

13. plug

14. endorsement15. hype

16. push

e) a favourable mention intended to sellor promote sth

f) a statement given in support of a person or product

g) the act, process, or method of tracing words or designs in the sky with a visible chemical vapor released from an airplane in flight

h) any mention of a company’s products that is not paid for

i) a sales tactic in which a seller attracts customers by advertising at a bargain price one item that is often out of stock, and then diverts their attention by encouraging them to buy another item at a higher price

j) the idea that the consumption of goods is beneficial to society or itseconomy

k) advertisement on radio, television orin a cinema

l) a catchy tune or verse that is easy to remember, used for radio or TV adsto advertise a product

m) an aggressive method or instance of selling or advertising; high-pressuresalesmanship

n) excessive praise or flattery

o) a method or technique other than paidadvertising by which a manufacturer can interest the public in a product.

p) an instance or practice of

- 36 -36

exaggeration or extravagant techniques used to sell or promote

2. Now fill in the gaps below with the above words and expressions:

1. He disliked Christmas for its extreme _____________.2. In advertising, ___________ means exaggerated commendation, or ___________. The term comes

from the Old English word pyffan, meaning “to blow in short gusts” or “to inflate; make proud or conceited

3. TV viewers appeared immune to conventional _____________; and a plethora of new media options based on new technologies promised to reinvent the very process of advertising.

4. This commercial would not be this good if the _____________ going with it were not so catchy!

5. The _____________ generated by the court case has given a welcome boost to our sales.

6. Sellers should not be allowed to use the _______________ tactics because it tempts buyers buy an undesired product at a higher price.

7. Who is the reputable _____________ who created this ad?8. For most of us, ______________ conjures up a less than pretty picture. You might even go so far

as to say it smacks of intimidation, of someone trying to sell something we wouldn't buy unless we were talked into buying it.

9. The training brochure deliberately adopts a________ ________ approach by tying to gently persuade the customers to buy the new brand of

10. Clients trimmed their ad budgets, and many turned to more cost-effective _________ _________ alternatives, such as coupons, direct mail, and direct marketing.

11. ___________ is done at an altitude of about 10,000 feet where it can be seen for about twentymiles in all directions.

12. That interview was just a way for him to __________ his new book.

13. We ____________ our product with good marketing

14. They paid $2 million to the world champion for the ____________ of the new aftershave.

15. Most advertising is paid for by ____________.

- 37 -37

3. Read the text below about media planning and use the wordson the right, listed 1-12, to form a word that fits in the samenumbered space in the text. E.g. 0 – strategic

Media Planning

A media strategy specifies the means for achievingthe media objectives. A 0_______________ decisionis how to allocate the media budget1_______________ ; that is, deciding in whichmarkets to advertise and how much to spend in eachof these markets. In making these decisions, themedia 2_______________ is guided by past sales andmarket shares of a brand in different markets aswell as future 3 ______________ .Category and branddevelopment indices are often used for thesepurposes. A 4 ______________ media strategy allocates moremoney in a market where sales are high, whereas an5 _______________ strategy allocates more money ina market where 6______________ are low but there ispotential to grow. Media class strategy refers tothe 7______________ of the budget to differentmedia classes. Budget allocation in media classesfocuses on matching media audiences with the targetaudience in addition to 8____________considerations. For instance, television may be thebest media class if both audio and video arepresent in a commercial, while magazines may bemore effective if detailed copy is required. Thethird strategic decision involves 9_______________scheduling over a campaign period. “10_______________ refers to advertising on aregular and constant basis throughout the campaignperiod. “Flighting” means advertisingintermittently, a period of advertising followed bya period of no advertising at all. “Pulsing” is a11 ______________ both continuity and flighting,periodically building high levels of advertising onthe top of lower yet continuous levels ofadvertising. The 12_____________ of sales oftenguides scheduling of advertising.

0. STRATEGY1. GEOGRAPHY

2. PLAN3. EXPECT

4. DEFEND5. OFFEND6. SELL7. ALLOCATE

8. CREATE

9. ADVERTISE

10. CONTINUE

11. COMBINE

12. SEASON

- 38 -38

(http://www.asa.org.uk/index.asp)4. Read the following text about the advertising

communication process. For each gap 1-10 write one word against the corresponding number. There is an example at the beginning: 0– source.

Source Dimensions: The Sponsor, the Author, and the Personaby William F. Arens

In oral communication, the source is typically one person talkingto another person or a group. But in advertising, who is reallythe 0 …….. of the communication? The sponsor named in the ad?Certainly the real-world sponsor is legally 1 …….. for thecommunication and has a message to communicate to actualconsumers. But as the model shows, the 2 …….. from sponsor toactual consumer is a long and 3……… one.To begin with, the sponsor does not usually 4…….. the message.That is the typically role of the sponsor’s ad 5……… or otherspecialists. So the author of the communication is actually acopywriter, an art director, or, most often, a creative group atthe agency. 6………. by the sponsor to create the advertisingmessage, these people exist in the real world but are completelyinvisible to thereader or 7 ………, even though they play a key role in composingthe text and thetenor of the message.At the same time, within the text of the ad resides some real orimaginary spokesperson (a persona) who 8 ……. some voice or toneto the ad or commercial. To the consumer, this persona, whorepresents the sponsor, is the source of the within-text message.But the persona’s 9……… is composed and crafted by the ad’sauthors 10……. for the purposes of the text; it is not a part ofreal life. It exists only in the virtual world of the ad.

(http://aef.com/channel.asp)

5. Read the text below about the impact of technology on advertising and fill in the gaps with the missing words:The Global Interactive Ageby William F. Arens

- 39 -39

In the last 15 years, expenditures by advertisers worldwideincreased rapidly thanks to improved economic conditions and adesire for expansion. The importance of advertising in individualcountries depends on the nation’s level of development andnational attitude toward promotion. Typically, advertising 1.________ are higher in countries with higher personal incomes. While the Communist countries once condemned advertising as anevil of capitalism, Eastern European countries now encourageprivate 2 . __________ and realize the benefits of advertising.Even China appears to have inherited the capitalist sensibilityof Hong Kong.The explosion of new technologies in the last decade has affectedadvertising considerably. With cable TV and satellite receivers,viewers can watch channels devoted to single types ofprogramming, such as straight news, home shopping, sports, orcomedy. This shift transformed television from the mostwidespread of mass media to a more specialized, “narrowcasting”3.____________. Now small companies and product marketers thatappeal to a limited clientele can use TV to reach audiences withselect interests.A concurrent change is the growing presence of VCRs and remotecontrols, which allow 4. ____________ to avoid commercials altogether by channelsurfing during breaks or simply zipping through them whenwatching a previously recorded show. Advertisers have triedplacing commercials on rented videos, but the 5. __________ hasyet to take hold, perhaps because viewers can still zap them.Computer technology has also had a huge impact. Personalcomputers, modems, e-mail, and electronic bulletin boards giveadvertisers new media for reaching 6. ___________ customers. Noweven the smallest companies can maintain computer databases ofcustomers’ names to integrate their marketing campaigns.But what’s in store is even more dynamic—the global informationhighway, and with it an interactive revolution. Advertising isevolving into a two-way medium where consumers with PCs, modems,CD-ROMs, and cable TV can choose the information they7._____________ and then spend time researching the productinformation they desire. With interactivity, rather than zippingor zapping commercials, people actually seek them out. And thisis a revolutionary way for advertisers to reach consumers.Agencies now have the opportunity to prove once again thatadvertising creativity is not about winning awards but abouthelping marketers sell things.

- 40 -40

Advertising has come a long way from the simple sign on thebootmaker’s shop.Today it is a powerful device that announces the availability andlocation of products, describes their quality and value, imbuesbrands with 8. ____________, and simultaneously defines thepersonalities of the people who buy them. More than a reflectionof society and its desires, advertising can start and end fads,trends, and credos—sometimes all by itself.In turn, advertising is 9. ___________ by the very technologyused to convey its message.In the past it was always a monolog. But today it’s evolving intoa dialog. The medium and the message have become virtually 10.___________.The endless search for competitive advantage and efficiency hasmade advertising’s journey in the last 100 years fascinating. Nowcompanies are realizing that their most important 11.___________is not capital equipment, or research capability, or their lineof products. In the 12._________ competition of the globalmarketplace, their most important asset is their customer and therelationship they have with that person or organization.Protecting that asset has become the new marketing 13.___________for the 21st century. In an effort to do a better job ofrelationship marketing, companies are now learning that they must beconsistent in both what they say and what they do. It’s notenough to produce outstanding 14. ___________ anymore. They mustintegrate all their marketing communications with everything elsethey do, too. That’s what integrated marketing communications reallymeans. And that will present exciting new challenges toadvertising 15. __________ in the years ahead.


a) imperative

b) access

c) personality

d) expenditures

e) heated

f) shaped

i) potential

j) asset

k) inseparable

l) trend

m) viewers

n) medium

- 41 -41

g) professionals

h) advertisingo) enterprise

6. Match the following words and expressions about types of advertising with their corresponding definitions:

1.consumer advertising

2.business advertising

3.local (retail)advertising

4.regional advertising

5.national advertising

6.international advertising

7.print advertising

8.broadcast (electronic) advertising

9.out-of-home advertising

10. direct-mailadvertising

11. product advertising

12. non-product(corporate or

a) advertising for products sold inone area or region, but not theentire country

b) advertising directed at foreignmarkets

c) newspapers, magazines

d) outdoor, transit

e) radio, TV

f) aimed at people who buy the productfor their own or someone else’s use

g) promotes the sale of products andservices

h) promotes the organiztion’s missionor philosophy rather than aspecific product

i) advertising aimed at customers inseveral regions of the country

j) advertising by businesses whosecustomers come from only one cityor local trading area

k) sponsored by or for a charitable ornonprofit institution, civic group,or religious or politicalorganization

l) attempts to stimulate immediate

- 42 -42

institutional)advertising

13. commercial advertising

14. non-commercial advertising

15. action advertising

16. awareness advertising

action by the reader

m) promotes products, services, orideas with the expectation ofmaking a profit

n) attempts to build the image of aproduct or familiarity with theproduct’s name and package

o) advertising sent

p) aimed at people who buy orspecify products and services for usein business

7. Now fill in the gaps in the text below choosing the righttype of advertising found in the left hand column of the tableabove:Much of the advertising we see daily in the mass media—TV, radio,newspapers, and magazines—falls under the broad category of1…………. . Usually sponsored by the producer (or manufacturer) ofthe product or service, these ads are typically directed atconsumers, people who buy the product for their own or someoneelse’s personal use. Companies use 2 ………………. to reach people who buy or specify goodsand services for business use. It tends to appear in specializedbusiness publications or professional journals, in directmailpieces sent to businesses, or in trade shows. Since businessadvertising (also called business-to-business, or BTB,advertising) rarely uses consumer mass media, it is typicallyinvisible to consumers. However, some business-to-business ads,by computer manufacturers and firms like FedEx, do appear onprime-time TV and in consumer magazines.Distribution affects the type of advertising used. Globalmarketers like Coca-Cola, IBM, and Kodak may use 3 …………. , inwhich messages are consistent in ads placed around the world.Other firms may promote their products in foreign markets with 4…………. , which may contain different messages and even be createdlocally in each geographic market.

- 43 -43

Companies that market in several regions of the United States anduse the major mass media are called national advertisers, andtheir promotion is called 5 ……………. . Some companies sell only inone part of the country or in two or three states. They use 6………….. , placing their ads in local media or regional editions ofnational media. Finally, businesses and retailers that sellwithin one small trading area typically use 7 ……………… placed inlocal media or direct mail. To promote their goods and services, companies use 8 ………………. .To sell ideas, though, organizations use 9 ………….. . A Citgo adfor its gasoline is a product ad. So are ads for banking,insurance, or legal services. But a Citgo ad promoting thecompany’s mission or philosophy (how the company protects theenvironment while drilling for oil) is called nonproduct, corporate,or institutional advertising. Similarly, while commercial advertising seeks profits, 10 …………….is used around the world by governments and nonprofitorganizations to seek donations, volunteer support, or a changein consumer behavior.Some ads are intended to bring about immediate action by thereader; others have a longer-term goal. The objectives of 11…………….. , for example, are to create interest in, and an imagefor, a product and to influence readers or viewers to select aspecific brand the next time they shop.A direct-mail ad, on the other hand, exemplifies 12 ………………because it seeks an immediate, direct response from the reader.Most ads on TV and radio are awareness ads, but some are amixture of awareness and action. For example, a 60-second TVcommercial may devote the first 50 seconds to image building andthe last 10 to a local phone number for immediate information.


8. ADVERTISEA. Fill in the gaps below with the appropriate forms of the word advertise:1. If you want to expand your effectiveness you should __________ in several complementary mediums. 2. I found that people had got hold of some bright coloured cards that had been designed for ___________ purposes.

3. It now fell to the lot of young ___________ to arouse the interest of the public.4.His experience in ___________ writing was now to stand him in excellent stead.5. Have you read the job ___________ (UK informal) in today’s paper?

- 44 -44

6.An ___________ is an advertisement in a newspaper or magazine designed to look like an article by the writers of the magazine.

B. The word advertising can combine with different words to formmeaningful word combinations. Pre- or post-position the followingnouns to obtain suitable collocations: point-of-sale, transportation,column, manager, word-of-mouth, department, consumer, direct mail, effectiveness,product, spending, staff, readership, television, corporate, audience and then makeup sentences of your own.

______________ advertising__________________________________________________________________________________________________

advertising _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________

C. Decide which of the following verbs collocate with advertisement: lift, run, draft, display, devise, wind up, place, tailor, lead, write, expose sb to

9. Read the following text about advertising slogans:

The Art & Science of the Advertising Sloganby TIMOTHY R. V. FOSTER

A slogan should be a statement of such merit about a product orservice that it is worthy of continuous repetition inadvertising, is worthwhile for the public to remember, and isphrased in such a way that the public is likely to remember it.

- 45 -45

The purpose of the strapline (slogan, claim, endline, signature,etc.) is to leave the key brand message in the mind of thetarget. It is the sign-off that accompanies the logo. It says "Ifyou get nothing else from this ad, get this...!"Slogan CharacteristicsA perfectly formed tagline should have as many of thesecharacteristics as possible:it should be memorable; it should recall the brand name; itshould include a key benefit; it should differentiate the brand;it should impart positive feelings for the brand; it shouldreflect the brand's personality; it should be strategic; itshould be campaignable; it should be competitive; it should beoriginal; it should be simple; it should be neat; it should bebelievable; it should help in ordering the brand; it should notbe in current use by others; it should not be bland, generic orhackneyed; it should not prompt a sarcastic or negative response;it should not be pretentious; it should not be negative; itshould not be corporate waffle; it should not make you say “sowhat?” or "ho hum"; it should not make you say "oh yeah??"; itshould not be meaningless; it should not be complicated orclumsy; you should like it.A slogan should be memorableMemorability has to do with the ability the line has to berecalled unaided. A lot of this is based on the brand heritageand how much the line has been used over the years. But if it isa new line, what makes it memorable? I suggest it is the storytold in the advertisement - the big idea. The more the lineresonates with the big idea, the more memorable it will be. 'Mygoodness, my Guinness!', as well as being a slick line, was madememorable by the illustrations of the Guinness drinker seeing hispint under some sort of threat (perched on the nose of aperforming seal, for example). It invoked a wry smile and a tingeof sympathy on the part of the audience at the potential loss ifthe Guinness was dropped.If it is successful, ideally the line should pass readily intocommon parlance as would a catchphrase, such as 'Beanz meanzHeinz' or ''Where's the beef?'In addition to a provocative and relevant illustration or story,alliteration, coined words, puns and rhymes are good ways ofmaking a line memorable, as is a jingle.Let's look at some examples of these:

AlliterationJaguar: Don't dream it. Drive it.

- 46 -46

Coined wordsGuinness: Guinnless isn't good for you.

PunsTic Tac Candy Tic Tac. Surely the best tactic.

(www.adslogans.co.uk)A. Synonyms. Find word which mean the following:

a) worthiness

b) formulated

c) salient

d) dull

e) corresponds with

f) smooth

g) placed

h) touch

i) saying

j) arresting

k) bestows

l) rouse

B. Antonyms. Now find words which mean the opposite of the following:

a) inadequately

b) counterfeit

c) detest

d) broken

e) questionable

f) limited

g) countermand

h) honest speech

i) gain

j) strenuously

k) nonessential

l) favourable

- 47 -47

UNIT THREEFINANCE


1. Read the following text about the strategic role offinance:

Finance’s Strategic RoleThe goal is to heighten finance’s strategic role while avoiding net losses and extraordinary charges.

By JOHN S. McCLENAHEN

Finance’s days as the unimaginative keepers of accounts payableand receivable and the narrowly focused controllers of costs arenumbered. In the gathering global quest to create greatercorporate value, CFOs, comptrollers, treasurers, and thethousands of other folks in finance and accounting are having tochange not only the ways they look at business, but the ways theydo business as well. For example, such traditional corporate performance measures asROE (return on equity) and EPS (earnings per share) are beingrelegated to second-class status as metrics such as EVA (economicvalue added), MVA (market value added), and CFROI (cash flowreturn on investment) become management’s primary tools. "People are realizing that you can’t sell short your long-termfuture purely for the sake of hitting a certain quarter’searnings-per-share," observes Chris Weidenhammer, a former FordMotor Co. product manager who’s now a principal at the GeorgeGroup, a Dallas-based manufacturing consulting firm. The new economic-value tools, says an approving Peter F. Drucker,enable executives to view the entire enterprise and to redeployassets to generate the greatest yield. For the same reason,Drucker applauds the reintroduction of economic-chain accountingto U.S. industry in such firms as Ford and Corning Inc. Inventedin America nearly a century ago and employed today by Japan’slargest exporters, economic-chain accounting overcomes

- 48 -48

traditional cost accounting’s inability to square factoryperformance and the impact of manufacturing changes on the entirebusiness by allowing executives "to see the total costs and theiryields through the entire economic process from supplier toultimate consumer," Drucker stresses. Significantly, too, as performance metrics and accounting methodsare being substantively changed, the corporate quest for greatervalue creation, the drive to globalize, and the emergence ofhigh-tech information exchanges called shared service centers arealtering the traditional command-and-control structure of financeand accounting. Rigidity is out and hybrids of centralized anddecentralized activities are in. Sophisticated systems permit theprocessing of sales, inventory, and other essential data to beconsolidated even as a company’s operating units around the worldare gaining greater access to the numbers and being able tocrunch them for local use. As traditional practices are swept aside and conventionalthinking is challenged, the bottom line is that finance andaccounting people increasingly are active strategic partners inthe fortunes of manufacturing firms in the U.S. and beyond itsborders. Indeed, the world of the new manufacturing is also theworld of the new finance. Measuring Up An international business landscape littered with acronyms is adramatic illustration of how intense the corporate pursuit ofvalue creation has become during the past half-decade. Smartmarketers of performance measures have capitalized on risingdemand, and a battle for clients rages, for example, between thefolks who gave the world EVA and the people who came up withCFROI. But, in part because it’s been so well promoted by Stern Stewart& Co., its New York-based developers, EVA is the most readilyrecognized of the new corporate-value metrics. "It is now truly global," says John Ballow, a senior vicepresident at Stern Stewart who was introduced to EVA when he wasworking at Grumman Corp. in the early 1990s. Stern Stewart hasworked with more than 300 companies in the U.S., Europe, Japan,Australia, New Zealand, Latin America, and South Africa. "We aredealing with companies that range from US$100 million or less tocompanies that are intergalactic in reach, like Siemens," Ballowstates.

- 49 -49

Drawing on data that already appear on the income statement andbalance sheet, such firms as Atlanta-based Coca-Cola Co., SiemensAG, and Singapore Technologies Marine Ltd. do the basic EVAcalculation by subtracting operating costs and the costs ofcapital from sales revenues. By gathering "all the pluses and minuses of a decision into onemeasure," the unique arithmetic gives managers a superior toolwith which to make (often-tough) tradeoffs, boasts G. BennettStewart III, senior partner and cofounder of Stern Stewart.Roberto C. Goizueta, Coca-Cola’s late chairman and CEO, liked totell a story about EVA and the decision to switch to cardboardsoft-drink concentrate shipping containers from stainless steel,Stewart relates. The reusable stainless steel containers that saton Coke’s balance sheet were written off very slowly, somethingthat helped to increase profit and profit margins. In contrast,shipping concentrate in single-use cardboard containers wouldraise unit cost and reduce profits and the profit margin -- butit would require very little investment of assets. The containerscould be "expensed," written off immediately. "If you run the EVA calculation, you find that the freeing up ofassets on the balance sheet by switching to cardboard saves you acapital charge that overcomes any shrinkage in profit that youmight incur," Stewart explains. Ballow, his Stern Stewart colleague, asks, "What’s wrong with[doing a better job of] managing that capital?" Indeed, senior financial officers of U.S. manufacturing companiesbelieve that management’s increased focus on leveraging andmanaging assets is one of the major benefits of economic valueanalysis, reveals a 1996 Manufacturers Alliance study. TheArlington, Va.-based trade association’s study showed also that33% of the responding companies had adopted some economic valueperformance measure -- and that another 10% were evaluating one.A more recent Sibson & Co. study of major U.S. manufacturersshows nearly half -- 49% -- using economic-value measures forbusiness planning and financial management.

(http://www.industryweek.com/CurrentArticles/asp/articles)

2. Choose the correct answer to the following questions:

- 50 -50

1. According to Peter F. Drucker the reintroduction of economic-chain accounting is benefic because it ...

a. carries on tradition in cost accounting.b. helps senior managers appraise the economic process.c. attracts Japanese employees.d. brings down costs.

2. The most significant alterations brought to the traditional structure of finance and accounting consist in ...

a. the emergency of introducing high-tech information programmes.

b. the rigidly centralised activities.c. the elaborate data processing systems.d. the setting up of several operating units all over the

world.

3. Finance and accounting people struggle more and more to...a. bring together tradition and convention.b. work out solid financial strategies for manufacturing

companies.c. travel and work abroad.d. sign firm contracts with manufacturing firms.

4. Coca Cola’s decision to switch to cardboard containers was preferred to the reusable stainless steel containers because....

a. cardboard containers were lighter.b. stainless steel containers could not be labelled

properly.c. the book value of cardboard containers could be reduced

to zero instantly.d. cardboard containers was a safer investment.

5. The number of US manufacturers considering economic value performance measures....

a. has been on the increase.b. is strictly monitored by the Manufacturers Alliance.c. represents as much as 10% of the responding companies.d. has dwindled.

3. Read the following text about financial resolutions

10 Financial Resolutions for the New Year

- 51 -51

A Practical Guide to Putting Your Life on Track for Success

1. ______________________ Have a clear, concise financial goal for the year. It isn’t good enough to say, “I want to have my credit card paid down and more money in the bank”. Instead, you should say, “I have the balance on my credit card paid down to $0, over $5,000 in my savings account, and an IRA containing 50 shares of Coca-Cola.”

2. _____________________ Make a list of your liabilities and organize them by the annual interest rate. Those with the highestrates [most likely your credit card debt] should be paid off immediately. It does no good to invest money while you are paying19%+ each year. In a lot of cases, the wisest course of action isto sell any certificate of deposits, savings bonds or other cash holdings and use them to pay the balance. Why? If you owe $10,000on your credit card and pay 19% interest annually [$1,900 per year], while at the same time, own a $10,000 certificate of deposit at a bank, paying you 4% interest [$400 a year], you would actually save yourself $1,500 a year by paying the debt!

3. _____________________ If you haven't done so already, open an individual retirement account [or IRA for short]. Your financial planner or accountant should be able to tell you whether a Traditional or Roth IRA is better for your specific needs. Both offer important tax advantages that can add up to a lot of money by retirement.

4. _____________________ Automatic savings plans are now offered for everything from brokerage accounts to savings bonds. Simply call your broker and tell them you want a certain amount of moneywithdrawn from your checking or savings account each month, on a certain date, and deposited into your investment account. This way, you are forced to save because the cash is drawn directly from your bank before you can get your hands on it. Investors canoften sign up for ASP's through a company's direct stock purchaseplan. In these instances, the money is withdrawn and used to purchase additional shares of stock in the particular company. The United States government offers a similar service to those interested in investing in savings bonds.

5. _______________________ Banks and financial institutions charge fees for everything under the sun. Is it really necessary to have several credit or checking accounts? Although there are

- 52 -52

exceptions, in the vast majority of cases the answer is a firm no! To put things into perspective: imagine your bank charges you$8 each month for your checking account. In thirty years, that $8will have added up to more than $8,500 after taxes!*

6.______________________ Most people can name at least one thing they are truly passionate about. One of the ways to enjoy your work is to only do the things you enjoy. Find a way to turn your passions and hobbies into profit. The world is full of amazing jobs such as full-time ice cream tasters and video game testers!

7._____________________ Any time you make purchases with cash, only spend whole dollar amounts. If you go to the grocery store and your ticket comes to $67.39, pay $70 in cash and pocket the change. The first thing you should do when you go home is throw the money in a large container [empty Culligan water jugs are perfect]. If you absolutely adhere to this policy and don’t spendany of the change, you are likely to save several thousand dollars over the course of a year. Use the money to pay down debt, buy stocks and bonds, or go on vacation.

8. ____________________ I’ve said this before and I’ll say it again; one of the most effective ways to realize the value of money is to give it away. The next time you get your paycheck, take 5% of your salary in cash [the greenbacks in your pocket will make it seem far more real than if you simply wrote a check or used a debit card]. Walk into a Starbucks and anonymously pay for the other customers in line. If you pass a child in Wal-Mart staring at a new video game, take out your wallet and buy it for them. In both cases, the recipients are sure to remember your kindness for years to come. It is a powerful and effective way tochange other people’s lives for the better while giving you a better sense of freedom financially. Suddenly, you realize just how much promise $20 contains.

9. _______________________ Knowledge is power. If I asked ten people on the street how much they spent last year on books, or movie tickets, nine of them probably couldn’t answer. With a few keystrokes, however, someone using personal finance software suchas Microsoft Money or Quicken can find out. Personally, I print areport at the end of every December and spend an evening studyingand going over my income and expenditures for the year. I’m often

- 53 -53

surprised at the amount I spend on small items such as ATM bank fees and cappuccino.

10. _____________________ If you want to learn to cook, you read cookbooks. If you want to learn to fix an engine, you ask someoneto show you. The printed word is amazing in that it allows you tocommunicate directly with the most brilliant financial minds of the past century. By picking up a copy of The Intelligent Investor, One Up on Wall Street, or Common Stocks and Uncommon Profits, you can be taught how to value investments, set up your portfolio, and spot the characteristics of a classic growth stockdirectly from the men who did it most successfully. Through the written word, their death, retirement, or physical location is rendered meaningless; their ideas, philosophies, and techniques live on. It’s as if you are inviting Benjamin Graham or Philip Fisher into your home, any time you choose, at a moment’s notice,simply by picking up a copy of their work and turning the page. Consistently applying yourself to learn as much as you can about the financial markets, the nature of money and investments in general is absolutely essential to creating long-term wealth.

(http://beginnersinvest.about.com/library/lessons/bl-introduction.htm)4. Fill in the gaps with the appropriate subheadings frombelow:

a) Prioritize Your Debtsb) Collect Your Change c) Enroll in an Automatic Savings Pland) Close Unnecessary Accountse) Give Money Awayf) Read a Financial Book Each Monthg) Know What You Wanth) Begin Using Personal Finance Softwarei) Make Money Doing What You Lovej) Open an IRA


1. Read the following text about financial planning:Financial Planning is Important for BusinessOwnersby MICHAEL J. McDERMOTT

- 54 -54

Too many people have the idea that financial planning is acomplicated process that only the very well-to-do need to worryabout. To be sure, there are some 1. __________ in the financialplanning industry itself who promote that notion. In point offact, however, financial planning is something EVERYONE needs todo, especially people who 2.__________ their own business or areplanning to."It's not for the well-to-do; it's how you become well-to-do,"say Jonathan D. Pond, the financial 3.__________ on PBS's NightlyBusiness Report. "People who say they can't or won't do it reallyare saying they don't mind spending their golden years under theGolden Arches, because that's what will happen to them."Strong words? No doubt, but Pond (who describes himself as thefinancial planner of the financial planning industry loves tohate because of the 4,___________ approach he advocates) alsosays that virtually everyone has the means to avoid that gloomyfuture.The good news is, it's easy to do; the bad news is, there's no"magic bullet." In a nutshell, financial planning for "regular"folks 5.__________ two things; First, you have to save some moneyto invest; second, you have to learn how to invest it.Neither is as hard as some people fear, but too many are doing alousy job at both.At the same time, people are bombarded daily with financial and6.__________ news that has little or no relevance to their lives.Stories about derivatives scandals, option puts and calls and theother arcane flotsam and jetsam of the financial world don'tserve to educate most people; they just confuse them.Financial planning takes on a critical role for business ownersbecause most of them are responsible for 7.__________ their ownretirement plans. There are many ways to do this, 8._________from the simplicity of an IRA or SEP to a more complex Keough,401(k) or defined benefit plan. It's best to consult a9.__________ financial planner or tax advisor to decide whichtype of plan will best meet your needs.Whatever plan is chosen, financial planning is the key to makingit work. "Every person's goal is to be able to retire10.__________," says Pond. "You want your income in retirement toprotect you against inflation and allow you to maintain yourlifestyle."Boiled down to the 11.___________, financial planning is abouttwo things - accumulating wealth and protecting it.

- 55 -55

There are only four legal ways to create wealth: marry it,inherit it, win the lottery or spend less than you12.___________. Obviously, only one of those options is realisticfor most people.The sooner you start to save, the better. The 13.___________person in his 50s would have to save more than half his yearlygross income to retire at age 65, Pond warns. "Whereas a 30-year-old who starts saving just 10% of his income will be so flushwith cash at 14.___________ he'll have trouble spending it all."The most important thing is to start saving, no matter what yourage or how little you can afford.The financial planning process itself is relatively simple. Notethat the emphasis is on "process." You should not think of afinancial plan as a document, but rather as something you do on a15.__________ basis - at least every year. As your needs changeover time, so will your plan.

(http://www.busop1.com/finplan.html)

Fill in the gaps in the text above with the missing words:

a) economicb) do-it-yourselfc) rangingd) commentatore) earnf) regularg) comfortably h) setting up

i) nitty grittyj) retirementk) averagel) certifiedm) boils down ton) practitionerso) own

2. Read the following text about factoring:

Factoring is an Effective Financing Option for Temporary Employment Agencies

by GREG CURTISSIt's a familiar problem for most temporary employment agencies. Your biggest customers are loyal and financially 1.________, but slow to pay due to corporate red tape or a longer billing cycle. That's no problem — for them. Meanwhile, you've got your own people to pay — employees, suppliers. You need cash and you need it now.

- 56 -56

There are many ways to 2.__________ cash flow. However, not all may be right for you. If your business is small or new, you may not 3.__________ for a traditional working capital loan. Or you may need cash flow assistance above and beyond such a loan.One 4.__________ is to hire a factor. A factor is a company that purchases receivables, giving your business an advance payment upfront. It is a mode of financing that can help free businesses from the cash-flow squeeze caused by 5.__________ customers. As an end result, a business can generate instant capital and more easily predict and manage its cash flow.Companies in the services industry are particularly well-suited to factoring as a financing 6.__________. Temporary employment agencies illustrate the process well. Temporary employees placed must get paid on a weekly 7.___________ but many of the clients are larger companies that may take longer to pay. Factoring can help such a firm cover its cash flow.Despite the benefits of factoring, many businesses do not take advantage of this financing tool, either because they are unawareof its 8._________ or due to misperceptions on how it works.Factoring has been used by businesses around the world for more than four centuries as a respected way to manage cash flow. For example, nearly all of the financing done in the 9.________ industry is done through factoring. Additionally, every time a restaurant processes a payment by credit card, it is engaging in a process similar to factoring, since the credit card processing company advances the restaurant the payment immediately and then 10._________ the money. Today, it is estimated that factoring is a $100-billion-a-year industry in the United States.Factoring works like this: A factor purchases its clients' invoices and immediately advances most of the invoice amount in cash. The remainder of the invoice amount is 11.________ to the client upon collection, minus a small service fee. Ideally, the fee should be all-inclusive and not 12__________ from two and a half to four percent, based on the credit and collection characteristics of the client and its customer base. In selectinga factoring company, it is important to have the factoring firm specify up front if there will be any additional processing, administrative or other hidden fees in addition to the percentagecharge.Invoices can be purchased individually but usually are processed in batches as part of an ongoing account. Depending on the factor's scope of service and the needs of the client business, afactor can handle other administrative tasks as well, such as

- 57 -57

helping 13._________ a company's accounting up to date, assistingwith collections and advising on tax requirements and other issues. For a small business with a lean staff, these services are worth consideration.

Is factoring right for you? Traditionally, this mode of financingworks best for small to mid-sized companies that don't have much 14.________ yet or start-ups that haven't developed an established relationship with a bank. In the latter case, it can be the temporary financing measure that fills in until a working capital loan is possible. Factoring also fills a need for rapidly-expanding companies who are 15.__________ their operatingcapital.

(http://www.eminfo.com/articlesection/fiaefoft.htm)Choose the best word from below to fill in the gaps:

1. a) sound b) robust c) fit d) total2. a) form b) make c) generate d)breed3. a) qualify b) warrant c) adjust d) suit4. a) preference b) selection c) decision

d) alternative5. a) objecting b) slow-paying c) irate

d) unsatisfied6. a) appliance b) engine c) tool d) gadget7. a) bases b) basement c) basis

d) base8. a) availability b) opportunity c) possibility

d) flexibility9. a) wear b) robe c) garment d) vestment10. a) earns b) collects c) gains

d) makes 11. a) removed b) reduced c) recovered d) remitted12. a) excel b) eclipse c) enhance d) exceed13. a) preserve b) store c) keep

d) maintain14. a) wealth b) collateral c) money d) budget

- 58 -58

15. a) outgrowing b) outgoing c) outgunningd) outclassing

3. Read the extract below about interest-based negotiations. Inmost of the lines 1-15 there is one extra word. It is eithergrammatically incorrect or does not fit in with the meaning ofthe text. Some lines, however, are correct. If a line is correct,write CORRECT against the corresponding number; if there is anextra word in the line, write the extra word in CAPITAL LETTERSagainst the corresponding number on your answer sheet. E.g. 0 -RAISE

00 - CORRECT

000123456789101112131415

Investment ForumsIs your company trying to rise capital in the private market? Ifso, you will likely participate in some type of an investment orventure forum. In today's market, where the money is not flowingfreely as it did 2 years ago, the ability of a company topresent to a single audience of angel investors, venturecapitalism and others in the field can be critical in raisingcapital. Therefore, participating in an investment forum is allmore appealing and sometimes necessary. However, giving thecurrent Enron debacle and the heightened scrutiny by theSecurities and Exchange Commission ("SEC"), companies should notforget that their capital raising activities are subject to theSEC rules and regulations and the individual states in whichtheir investors live. In order to offer securities for sail or sell securities, acompany must either register the securities with the SEC and theapplicable states, or the company must find an exemption for thespecific transaction or security. Many private securitiesoffering are exempt from the registration and fillingrequirements under Regulation D of the Securities Act of 1933(the "Act") and the corresponding state statutes. In addition tomeeting the specific requirements of a Regulation D exemption, a company must obey the rules in Rule 502 ofRegulation D, one of what directly affects how a company canparticipate in an investment forum. Specifically, Rule 502(c)prohibits a company, or any person acting on it’s behalf, fromoffering or selling securities in any form of generalsollicitation or general advertising.

(http://www.dwt.com/practc/corp_fin/articles)

- 59 -59

4. Read the text below about how companies create their ownfinancial software and use the words on the right, listed 1-12,to form a word that fits in the same numbered space in the text.E.g. 0 –HUGELY

PIZZA-METER. Companies whose businesses aren't 0._______ complex sometimes create their own financial software in an effort to hold down its cost. For instance, Domino's Pizza has written a program for store audits, which it does at least twice a year at each of its 7,291 1.________. Duringa visit, auditors enter into their handheld 2._______ data on how hot the pizza is, how fast it's made, and how clean the stores are, explains Ken Peebles, who 3._________ distribution, strategicoperations, and customer satisfaction at Domino's.Internal 4.__________ can quickly insert extra questions -- to gauge the reaction of customers, forexample, to the company's latest 5._______, which atthe moment is Philly cheese-steak pizza. Now that somany 6._________ programmers are available cheap, the do-it-yourself approach can be especially cost-effective, 7.________ say.Either way, most finance projects today must delivera 8.________ on investment in less than 12 months, says IDC's Pang. In the past, says Vanguard's Packard, his company couldn't always pay bills fast enough to take advantage of supplier 9.________. Buta recently installed accounts-payable product has solved that problem. Moreover, Vanguard's new electronic 10._________ system has consolidated its purchasing to fewer suppliers, allowing it to negotiate deeper discounts. And once it centralized much of its 11.__________ work, Vanguard cut staff. "The money we spent [on the system] paid for itself through more 12.________ processes," says Packard.

(http://www.businessweek.com/)

0. HUGE

1. LOCATE 2. DEVISE

3. SEE

4. DEVELOP5. PROMOTE6. EMPLOY

7. ANALYSE8. TURN

9. COUNT

10. PROCURE

11. COUNT12. EFFECT

- 60 -60

5. Word-formation. Fill in the gaps with the correct formof the words finance, invest and risk:

finance

1. To bridge the gap between potential developers and available ________ sources, EC has hired a project _________ specialist

2. Potential sustainable energy projects often fail to become _________ deals due to lack of information and a variety of market and financing barriers.

3. On the investment side, _________ seeking well-developed transactions often find that sustainable energy projects fall outside standard market and transaction structures and present unfamiliar credit-risk issues.

4. Our team is uniquely positioned to work with institutions on both sides of the _________ gap in order to identify ambitious projects.

5. Whatever source of funding you pursue to _________ your business venture, your chances of success will be greatly increased if you present your case armed with properly prepared, credible financial forecasts.

6. The _________ of our company are in a bad state.

invest

1. Professional fund managers __________ in stocks and shares and use their expertise to attempt to give better returns than the stockmarket.

2. One Company manages the __________ on behalf of the individual investing.

3. __________ should always consult with an Independent Financial Adviser before investing.

4. Before ________ in any of these products, an individual should discuss with their financial

consultant the _________ techniques employed

5. Morningstar's indexes were designed to be fully _________.

risk

1. We _________ losing a lot of money in this venture.

2. Anything that promises to pay too much can't help being __________.

3. The more you know about investment _________, the less you'll fear them.

4. “Measures of the ___________ of banking organizations” is the title of this interesting article.

- 61 -61

5. The German Finance Minster has asked parliament to back what he admitted was a highly ________ 2004 draft budget.

6. A __________ rate is the rate of return earned on an investment that carries no risk.

6. SHARES

Collocations. Match the following nouns and adjectives with share in order to form suitable collocations: register, redeemable, splitting, ordinary, capital, preference, option, authorised, paired, certificate

Now fill in the gaps in the sentences with the collocations you found above.

1. The _________ contains the list of shareholders, their addresses and details of the shares they own.

2. A ___________ is a preference share that the company has a right to buy back any time.

3. The stock of two companies under the same Management that are sold as one Unit with one certificate is known as _________.

4. _________ represent a fixed unit of a company’s share capital that provides a fixed rate of interest that must be paid before dividends are paid on ordinary shares and repaid first if the company is liquidated.

5. Each company should increase its __________ if it wants to expand.

6. The legal document given to a shareholder to prove that he/she owns shares in a company is a___________. It shows the number, class and serial numbers of the shares owned. The document is signed by two directors and the company secretary.

7. The ________ of a company represent the fixed units of a company’s share capital that usually pay a dividend and have voting rights.

8. A _________ should increase commitment to the company, since it represents the right offered to employees to buy shares in the company at a cheap price.

9. The _________ represent the number of shares authorised for issuance by a firm’s corporatecharter.

- 62 -62

10. __________ takes place when the company shares are divided into a number of smaller units as the price of the original shares is too high for small investors.

7. Match the following types of risk with their corresponding definitions:

Types of risk

1. market risk

2. maturity risk

3. longevity risk

4. timing risk

5. inflation risk

6. global risk

7. legislativerisk

8. credit risk

9. company risk

a) This is when stock or bond prices drop, and you appear to lose money on your investment.However, most losses are sustained over the short term of a year or less. As long as youdon't sell, your investment will have the chance to recover from price declines and earn you a greater profit.

b) The risk that the rising costs of inflation will outpace the growth of your investment over time.

c) This is the risk that the individual companyin which you invest will fail to perform as expected.

d) Specific to bonds, this type of risk refers to the company or government's inability to repay principal plus interest to the bondholder.

e) Also specific to bonds, this is the risk that the value of a bond may change from thetime it is issued to when it matures. The longer the period to maturity, the greater the potential for price fluctuation. That iswhy long-term bonds generally offer a higherinterest rate--to compensate for this greater risk.

f) Whatever laws the government passes today may be extinct tomorrow.

g) There are inherent risks when investing overseas, but considering that over 50% of the world's capital market opportunities exist outside of the U.S., a purely domesticstrategy can severely limit your long-term earnings potential.

h) This risk works two ways. First, you run therisk of investing a large sum of money when

- 63 -63

share prices hit their peak. Second, there'sthe risk that you'll need to access your money to pay for retirement or college expenses during a temporary market setback--causing you to lose money on your investment

i) This is the risk that you'll live longer than your income can support you.

8. Collocations

A. Match the adjectives and nouns in the left-hand column with the nouns in the right-hand column to form suitable collocations:

1. fractured2. growing3. industrialized4. fixed5. full 6. growth7. existing8. market9. potential10.strategic 11.service12.sole

a) businessb) countriesc) marketd) operatorse) costsf) missteps g) portfolioh) providersi) suppliersj) winnersk) difficultiesl) potential

B. Read the introduction to following text about the WorldTrade System and fill in the gaps with the collocations you foundabove. You may want to change the form of these:

Merger Endgames (I)

by A.T. KEARNYHidden beneath the chaotic surface of mergers and acquisitions lies a distinct pattern.Each consolidating industry passes through four stages: o Opening o Accumulation oFocus o Alliance Opening phaseDuring the first phase of industry concentration, the1.______________ is filled with players of all sizes. As a rule,

- 64 -64

the three largest suppliers account for a mere 10-30 percent ofthe market. The emergence of new businesses or the advent of deregulationtypically lies behind the fragmentation of 2.____________. Banks,airlines and utilities exemplify this trend. Telecommunicationsis another classic example. Until the 1990s, telecommunications markets in most highly3.____________ were largely regulated. But with the deregulationand liberalization of the telecommunications business, erstwhilemonopolists lost their position as 4._______________ in themarket. As obstacles to market entry began to fall, more and morecompetitors flooded the market. Then as cell phones gainedpopularity, even more rivals came onto the scene. Soon, theindustry was highly fragmented.For telecommunications, the largest mergers still lie ahead. Theconsolidation wave will be driven largely by the need to reducecosts via economies of scale. 5.____________ are unusually highin telecommunications, an industry whose infrastructure accountsfor 50 percent of telephone costs. In response, the globaltelecommunications industry has already made its first movestoward the accumulation phase. Companies that act quickly as thenext stage begins are more likely than their counterparts to comeout on top.Judging by telecommunications' 6._____________, we expectconsolidation to intensify and follow a pattern similar to whatwe have witnessed in other industries. More specifically, threeto five large European 7._____________ in the fixed-line businessare anticipated to survive. The winners will most likely be thosethat can leverage their 8.____________, succeed with their chosenstrategies and implement their plans effectively.British Telecom is expected to lose influence in Europe, butFrance Télécom and Télefonica are 9._____________. Smaller andmid-sized companies will either be wholly merged or joinalliances. For them, the choice of when and with whom to mergewill play a decisive role in their future success. The threemajor players will be surrounded by networks of large regionalplayers, namely Telecom Italia, British Telecom and KPN. Smalllocal companies are likely to merge. Télefonicás early move toget into relevant future markets has given the company anenviable headstart of about 10 years. Unfortunately, prospectsare not as bright for Deutsche Telekom and Mobilcom. Afterroaring off to a fast start in the liberalized European market,the latter is now encountering 10.____________. Mobilcom's

- 65 -65

http://www.transnationale.org/anglais/fiches/1739099287.htm

http://www.transnationale.org/anglais/fiches/1739099287.htm

http://www.transnationale.org/anglais/fiches/-1639890459.htm

http://www.transnationale.org/anglais/fiches/-1639890459.htm

partner France Télécom is financially strong but is notcapitalizing on its 11.____________. Deutsche Telekom is anambitious global player in cell phone services and has enteredinto partnerships in the Netherlands and Austria, but it is notconsidered a strong entry in the United States.

The experience of American telecommunications firm AT&Tillustrates how quickly 12.____________ result in a negativeimpact. Six years ago the former U.S. monopoly was still a realgiant, but it missed the trend toward consolidation, and today itis focusing heavily on catching up.

(http://www.globalpolicy.org/)

9. Synonyms. Now read the following text about the accumulationphase in the pattern of mergers and acquisitions and find words which mean the following:

1. inversion2. achieve3. unfriendly4. at the starting

point of 5. responsible for6. hurry

7. contract out 8. switch9. mixture10. financial

estimations11. remaining12. bad times

Merger Endgames (II)

By A.T. KEARNYHidden beneath the chaotic surface of mergers and acquisitions lies a distinct pattern.Each consolidating industry passes through four stages: o Opening o Accumulation oFocus o AllianceAccumulation phaseThe second stage, the accumulation phase, represents a 1.________of the first. The market begins to become less fragmented, andsize begins to matter. As competitors grow, they realize twoadvantages. First, growth in the marketplace helps them2._________ their goal of reducing costs through greatereconomies of scale. Second, their larger size helps prevent a3.________ takeover. This phase generally lasts for about fiveyears until three of the largest suppliers account for 30-45percent of market share.

- 66 -66

The global chemicals industry, breweries and food servicesbusinesses are in this phase. Automobile industry suppliers arenow 4.__________ of a strong consolidation movement, thusfollowing the footsteps of the automobile industry (which hasalready gone through this phase). In the automotive supply industry, the three biggest players5.__________ about 30 percent of the market. Mergers andacquisitions are part of the industry's daily fare as suppliers6._________ to acquire the additional competencies they need torespond to shifts in responsibility along the value chain. Theautomakers, facing fierce competition themselves, are demandingcustomers, constantly pursuing lower costs and greater returns oninvestment. Today, car manufacturers increasingly 7.__________complete modules of a vehicle and are simultaneously reducing thenumber of modules needed to produce a vehicle. We expect that inthe next five years automobile producers will work with just 10modules (including roof, cockpit and doors) to build a car. This 8._________ in responsibility delivers a major challenge tomost suppliers. Few are able to offer complete modules (and ifso, only because they have merged). A supplier cannot assumeresponsibility for a module on its own since each modulerepresents the 9._________ of many different technologies.10._________ about who will win or lose following this wave of consolidation are based not only on growth potential, but also onthe suppliers' opportunities for adding competencies.In coming years, the number of suppliers is likely to shrink by one-third from the current level of 8,000. 11.________ companies are also restricted by the number of manufacturers needed to makeeach module (we estimate four to five supplier conglomerates are needed per module).Those who do not respond to industry dynamics risk being left behind. But those who choose partners carefully and strategically, and make a strong contribution to a module, stand an excellent chance of surviving the 12._________.

(http://www.globalpolicy.org/)10. Antonyms. Now read the end of the text about the

focus and alliance phases in the pattern of mergers and acquisitions and find words which mean the opposite of the following:

1. loosen2. reachable

7. open8. untypical

- 67 -67

3. passive4. scattered5. higher6. undivided

9. slow down10. dissimilar11. ignorant12. losers

Merger Endgames (III)

By A.T. KEARNYHidden beneath the chaotic surface of mergers and acquisitions lies a distinct pattern.Eachconsolidating industry passes through four stages: o Opening o Accumulation oFocus o AllianceFocus phaseFollowing the accumulation phase the three largest playerstypically account for 45 percent of the market and now strive to1________ and reinforce their hard-won position. In the secondphase companies have as a rule attained a size that puts them2_________ for a takeover. The consolidation process at thisstage is not so much a question of mega mergers as the selectiveexchange of business units. The point is to strengthen corecompetencies and to clean up the company's portfolio, activitiesthat lead to a slight linear rise in industry consolidation. Uponconcluding the focusing phase and in transition to the fourthphase, the three market leaders have achieved a 60 percent marketpenetration. Shipyards as well as the rubber industry are currently in theconsolidation phase. The liquor industry has nearly completedit, having significantly streamlined its portfolio. Liquorcompanies are making 3.________ additional purchases to securethe end of the available capacity, and they are beginning toforge the first alliances. In this way other companies or parts of them are being boughtaggressively, but the growth is 4.________ and strategic. Themajor players are fighting hard for certain business units,while disposing of others. Regional and local suppliers cannot muster such strength on theirown. Increasing concentration in the trade is leading to5.________ average prices and higher marketing costs. Occupying asmall geographical niche raises chances for survival since theliquor business-like the food arena in general-is also local andmarked by highly differentiated consumer preferences. It isparticularly critical that smaller suppliers shore up their

- 68 -68

brands and prices as a means of defending their niche for thelong run. Alliance phase As we reach the end of the consolidation wave, the three largestmarket participants will have captured 70-80 percent of themarket. The industry becomes 6.________ and distributed; mergersand acquisitions become a rarity. Antitrust laws 7.________further consolidation and megamergers are out of the question. Inaddition, potential partners have long disappeared from thescene. The battle for the biggest and best pieces of the market is over.Many former competitors have either become part of the family,parent companies or equal partners. The remaining companiesbecome the object of alliances. The last acquisitions in theindustry are still in the offing. Alliances are formed at alllevels of the value-added chain. Cigarette manufacturers,automation and control equipment industry are 8.__________examples of industries in this final phase of consolidation. Theshoe industry, in the last throes of a powerful consolidationwave, also falls into this category. Aside from cross-industry patterns and phase-specificdevelopment, other factors serve to 9._________ industryconsolidation. Among the most significant are globalization,capital market pressures, the evolution of the technologyinfrastructure required to support networking, and the advent ofthe Internet. Conclusion: Within and throughout industries, there is clearevidence of a 10.________ consolidation pattern: Marketfragmentation is followed by a potent wave of consolidation ascompanies strive to get bigger. Mergers decline once a certaindegree of concentration has been reached. At that point,businesses focus on their core competencies until they no longerlook for mergers or acquisition at the end of the consolidationwave, but choose alliances. Consolidation is not random. Knowing the patterns and phases ofmerger and acquisition activity enables the 11.__________ playersto understand the merger chess board in their industry, evaluatethe players, and even forecast their movements. When companiesconsider the patterns that merger and acquisition activityfollows, and recognize where their industries stand on theconsolidation curve, they can proactively set strategicacquisition targets, execute accordingly-and emerge as12._________.

- 69 -69

(http://www.globalpolicy.org)


1. Read the following text about the current account options offered by NatWest:

NatWest Current Account Options

The convenient way to manage your day-to-day finances.Enjoy easy access to your money from over 30,000 cash machines across the UK. Each account also offers banking from a branch, byphone and on-line. We'll pay interest on your cleared balance whenever you're in credit.

- 70 -70

UNIT FOURBANKING

Current Plus The straightforward bank account for day-to-day access to your money.

Instant access to your money Need cash quick? Use your Cashcard to get instant access to your money 24 hours a day through our nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus logo.

Pay in shops with your card Use your Cashcard as a debit card, to pay for goods and services where you see the Solo logo and abroad where you see the Maestro logo.

24 hour access to your account Bank at any time of the day or night, from home, work or abroad, with our 24-hour telephone and OnLine Banking Service. System updates may mean that the service is unavailable for a brief period during the early hours of the morning.

A flexible overdraft option You could be eligible for Credit Zone Overdraft, our flexible overdraft that you can use whenever you need to.

Advantage Gold The current account designed to save you time and money on a range of services, for just £9 a month - with a 90-day, no-quibble money-back guarantee.

Instant access to your money Need cash quick? Use your Cashcard to get instant access to your money 24 hours a day through our nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus logo.


24 hour access to your account Bank at any time of the day or night, from home, work or abroad, with our 24-hour telephone and OnLine Banking Service.

Reduced Credit Zone interest rate As an Advantage Gold customer, you can enjoy a reduction of over 1.7% on your Credit Zone interest rate - from 17.80% EAR to 16.06% EAR

1% discount on all Personal Loans Take out a NatWest Personal Loan and get a 1% discount on the typical standard rate of 12.9% APR - a saving of over £290 on a £7,000 loan over 5 years with Loan Protector.

Extensive travel discounts Enjoy a range of travel discounts, including free travel

- 71 -71

insurance, commission-free travel money and American Express travellers' cheques and savings on package deals, cruises, car rentals and hotel bookings.

Advantage Premier An exclusive package of services, including a Premium Manager who will be allocated to you, for £150 a year - with a 90-day, no-quibble money-back guarantee.

Withdraw up to £750 a day When you open an Advantage Premier account you'll receive a Servicecard 250 that lets you withdraw up to £750 a day and guarantees cheques up to £250.

No pre-set spending limit on your Premier Card You'll also get the Premier Card - a gold MasterCard with a tailored spending limit, and many other benefits including AIR MILES and interest free credit.

24 hour access to your account Bank at any time of the day or night, from home, work or abroad, with our 24-hour telephone and OnLine Banking Service.

No arrangement fees on loans or overdrafts We offer a £2,500 overdraft at a preferential rate with no arrangement fee. You can also enjoy special loan deals, a flexible loan package (with no arrangement or early repayment fees and a flexible repayment period) or a 1% APR reduction on our standard Personal Loan rates.

Extensive travel discounts Enjoy a range of travel discounts, including free travel insurance, commission-free travel money and American Express travellers' cheques and savings on package deals, cruises, car rentals and hotel bookings.

Step Account A simple bank account that pays interest on your cleared balance and you can have peace of mind as arranged overdrafts and loans are not available on this account.

Instant access to your moneyNeed cash quick? Use your Cashcard to get instant access to your money 24 hours a day through our nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus logo. You can also use your cashcard to withdraw money free of charge at Post Office ® branches.

Pay in shops with your card Use your Cashcard as a debit card, to pay for goods and services

- 72 -72

where you see the Solo logo and abroad where you see the Maestro logo.

24 hour access to your account Bank at any time of the day or night, from home, work or abroad, with our 24-hour telephone and OnLine Banking services. System updates may mean that the service is unavailable for a brief period during the early hours of the morning.

Peace of mind You can arrange to pay bills and regular expenses with a standingorder or direct debit option.

Card Plus The smarter way to bank for under 16s, with all the benefits you'll come to expect from NatWest.

Instant access to your money Need cash quick? Use your Cashcard to get instant access to your money 24 hours a day through our nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus or Maestro logos.


Free services to make banking easier The Card Plus account also comes with a free card wallet, statement folder and paying-in book cover and tips on how to manage your money.

Student Account A specialised account for students from Freshers to finals and beyondIf you’re off to university soon, you’ll be wanting anaccount tailored to give you a flying start. Register now,and come August you’ll be the first to hear about theexciting 2003 NatWest Student Package, plus you could bestarting your studies with an extra £1,000.

Banking on campus We have more branches on or near campuses than any other bank or building society, with specially trained teams in 55 branches.

Student advisers available You'll find student advisers in all campus branches, to help you manage your money and give you advice on how to stay out of debt.

Instant access to your money Need cash quick? Use your Cashcard to get instant access to your

- 73 -73

money 24 hours a day through our nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus or Maestro logos.



Save money as you study We won't charge account fees, even when you're overdrawn, and allagreed overdrafts are interest-free. This means that we may be able to help you reduce your living costs.

Fee free services There's no annual fee if you get a Student Mastercard and no commission to pay on travellers' cheques or foreign money. We'll even give you a discount on our travel insurance range.

Stay covered on campus Our optional Student Belongings Insurance Protects your personal belongings and your landlord's property, whether you live in Halls, rented or shared accommodation, at specially negotiated rates.

Graduate Account A current account to help you through the transition from student life as you begin work or take a break.

Interest-free borrowing You can apply for an interest-free overdraft, or an interest-freeloan to pay off an existing overdraft, of up to £2,000 in the first year after you graduate, £1,000 in the second, and £500 in the third, with preferential rates if you borrow more and no account fees.

Instant access to your money Need cash quick? Use your Servicecard to get instant access to your money 24 hours a day through our nationwide network of over 30,000 cash machines, and abroad where you see the Cirrus or Maestro logos.

Special rates on credit cards Apply for a Mastercard and take advantage of a preferential introductory interest rate and no annual fee.

- 74 -74


Borrow more. Pay less Take out a Graduate Loan and borrow between £1,000 and £15,000, with preferential rates and no arrangement fee, to fund a new job, take a break, furnish a new place or buy a car.

Help with finding a job Our Graduate Job-Finding Service includes access to a national job database, and advice on CV preparation and interview technique. If you want to set up your own business, we're the number one business bank and our Small Business Advisers can help you get upand running.

Going travelling? Our Graduate Travel Club offers discounts on package holidays andflights, and you'll pay no commission when you buy travellers' cheques or currency from us. You can also get a 10% discount on NatWest Single Trip and Long Stay Travel Insurance.

Settling down? Take advantage of our Graduate Home-Finding Service and search on-line for properties for sale or rent throughout the UK.We also offer a fixed rate mortgage with a preferential rate and no deposit to pay, plus a £1 valuation fee, £200 cashback and no reservation fee, and a discounted rate mortgage with a preferential rate and with no valuation fee or deposit to pay.If you need contents and possessions cover, our specially negotiated Graduate Insurance has optional extra cover for computers and personal possessions.

Buying a car? Our Graduate Car-Finding Service, in association with Jamjar, hasadvice on buying as well as a free car search. We can also offer car insurance and breakdown assistance.

(http://www.natwest.com/personal/services/currentaccounts)

2. Answer the following questions referring to the text above about current accounts by choosing from the list (A-G) on the right below. Some of the choices may be required more than once. Note: When more than one answer is required, these may be given in any order:

- 75 -75

Of which current account are the following stated?

These accounts offer no overdraft facilities.

1……. 2…….

A. Current Plus

B. Advantage Gold

C. Advantage Premier

D. Step Account

E. Card Plus

F. Student Account

G. Graduate Account

This is a card for teenagers.

3…….

These offer extensive travel arrangements.

4……. 5…….

It provides arrangements for standing orders.

6…….

It gives fee-free services. 7…….It is designed for simple daily use.

8…….

These offer interest-free credit.

9……. 10……

It gives advice on setting up a business.

11…...

It offers, for a fee, the services of a specialist.

12……

It offers estate agent services

13……

It offers optional protection for personal belongings.

14……

These offer loan facilities.

15…..

16…..

17…...

It offers cheque guarantees.

18……

3. Read the following text about German banks:

5 Big German Banks in Loan Pool

By MARK LANDLER

- 76 -76

Five of Germany's largest banks, mired in their worst downturn since World War II, plan to announce on Wednesday that they will pool up to $50 billion worth of investment-grade loans in a new joint venture.

0………………………..

Deutsche Bank, Dresdner Bank, Commerzbank, HVB Group, and DZBank will participate in the venture to be run by the state development bank, Kreditanstalt für Wiederaufbau, or KfW.

The venture could raise up to 5 billion euros ($5.44 billion) through the sale of bonds backed by the loans.

1………………………….

The move is a radical step by the banks to confront their many problems, which range from mounting bad loans to plummeting profits and share prices, according to industry analysts.

"The banks are showing they're willing to try unorthodox solutions," said David Williams, a banking analyst at MorganStanley in London. "They're saying, `Our share prices have been killed. We've got to embrace change. We've got to do things that were once unthinkable.' "

Executives at the banks said the proposal was not related toa rumoured plan by the government to set up a "bad bank" — an entity to take over and sell off nonperforming loans fromthe private banks.

"This is not a bad bank," said a banker who spoke on condition of anonymity. "This is a good bank."

Under the plan, he said, the banks would put their most creditworthy loans into the venture. 2……………………….. Because KfW is state owned, the banks are expected to contend that the government should not tax them on the transfer of loans.

Moving the loans off the balance sheets of the banks would free capital because the banks would no longer have to back

- 77 -77

the credit risk of the loans with equity. It would also improve their rates of return for shareholders, and that could jolt their dismal share prices.

3………………………..

"We are very hopeful that this program will help bring aboutthe necessary funds for small and medium-size companies," Barbara Hendricks, a top official in the finance ministry, said in an interview with Bloomberg News.

4……………………….. Bankers here have repeatedly had to dispel suggestions that Germany is facing a banking crisis like that in Japan.

How Germany can avoid such a crisis is being hotly debated. 5…………………………….

Analysts have said that without state intervention the prospect of a bank that would take over bad loans is unlikely.

The problem with creating such a bank, Mr. Williams said, is "the banks have to admit they've got those bad loans. 6……………………………

4. Choose the best sentence from below to fill each of the gapsin the text above. E.g. 0 – B. Do not use any letter more than once. There is one extra sentence.

A. German government officials, who had a hand in arranging thejoint venture, hope the banks will use their greater financial flexibility to resume lending, particularly to small and medium-size companies, which have experienced a drying up of their credit as Germany's economy skirts a recession.

B. The move, which is dependent on a change in German tax laws,could help to lighten the banks' overburdened balance sheets.

C. " In such a scenario, he added, "the shareholder still has to take some pain ultimately."

- 78 -78

D. The pooling, known in industry jargon as securitization, is common in other countries, but Germany's venture is notable for its size and collaborative nature.

E. Earlier this year, the chief executive of Deutsche Bank, Josef Ackermann, floated the idea of the government's setting up a bank to take over bad loans in a meeting with the chancellor, Gerhard Schröder.

F. That would allow KfW, which has a triple-A credit rating, tosell bonds backed by the loans.

G. But some sort of solution is urgently required, since an increasing number of German firms are warning that bank financing is proving hard to secure in the present difficultclimate.

H. Of the major private banks, only Deutsche Bank managed to eke out a profit in the last year.


Adding Value to the Banking Relationship.It is, perhaps surprising that bank financing, typically representing some 15% of company overheads very often receives little critical attention, being accepted as a necessary but largely immutable cost centre. Similarly, the 1………………………. function tends to be viewed internally as a function apart, having little reference to the main business of the company. Banking and Treasury should on the contrary be seen (and evaluated) as essential props to the main business of the company, to which they should be fully sensitive.Which Bank?When first selecting (or later reviewing) ones bank, whether for domestic or foreign operations, one should ensure that it meets the following essential requirements.

That it has a necessary understanding of the nature and vagaries of ones industry and ones business.

- 79 -79

That is has a branch network appropriate to ones business trade - for clearing and cash 2………………………. requirements (at 7.5% p.a., one day lost in money transmission of £100m costs£30k annually!)

That it has a full range of services (and, if dealing internationally, of foreign relationships)

That it has a readily understandable and efficient screen-based system for money management.

Finally, that it has an acceptable scale of tariffsThe Cost of Funds.Corporate treasurers should familiarise themselves with their bank's 3…………………… criteria, viz. Net Worth, Cashflow capacity, Profit/Interest cover etc. As corporate-banking relationships tend to be singular and of long duration, it is often a good idea, when renewing or securing new finance and before concludingan arrangement, to invite two or more banks to provide indicative4………………….... It is otherwise difficult for corporate treasurers to 'benchmark' borrowing rates (or, indeed, rates on deposits and5……………………..). Banks may usefully be asked to explain their rate structures e.g. 'Prime' and 'AA', also funding 6……………………….. vis avis EURIBOR (formerly DIBOR). In this way one can note the 'spread' between the cost and the return on ones funds. A common source of banking cost noted is that of the spread between concurrent company savings and 7……………………. The first rule of borrowing must be first to use ones own money! Thereafter, to secure any additional 8……………………. required, loan commitments can be discussed and arranged with banks - the cost, say 1/4 to 1/2% will always be lower than the spread between concurrent borrowingand savings rates.The Overdraft.Despite associated surcharges (and some of its curiosities), the overdraft, justly remains the most popular form of corporate 9………………….. However, to achieve cost efficient utilisation, one should ensure that:

The level of overdraft negotiated is fully adequate to monthly and seasonal 10…………………… and to other contingencies (and will not need to be supported by e.g. 'lagging' companycreditors)

That the rate is negotiated at the minimum, by reference to company credit rating.

That the local bank is convenient to the main source of cash11…………………….

- 80 -80

When trading involves foreign currencies, whether at home orabroad, that the overdraft is denominated in the appropriatecurrency.

That the rules of the clearing system are understood and observed e.g. the forward dating of lodgements and the back dating of a company's own.

Further, That inappropriate surcharges or covenants do not appear in

the facility letter.Overdraft Interest Surcharges.It is not unusual to note bank interest 12………………….. which greatlyincrease the basic cost of borrowing. These surcharges can be managed and minimised.1. The Excess PenaltyThis can be reduced by arranging an appropriately high overdraft limit, by negotiating a standby 13…………………… for exceptional eventsor periods and by managing ones account by reference to the valuebalance rather than the statement position. 2. Set-OffCharged on the lower of concurrent debit and credit balances, this charge can generate a high cost, even when ones net bank position is in a credit surplus. It can be avoided by monitoring balances and by making account 14………………………...3. The 30 Day RuleIncreasingly, this stipulation is being dropped by Irish banks, who recognise that the overdraft has become a year-round funding instrument.Other Overdraft Terms.The other terms of the facility letter e.g. regular reviews, furnishing management accounts and advance notice of foreseen difficulties should be observed and will assist in promoting a supportive banking relationship.Account Grouping.All current accounts should, of course, be grouped, not only for overdraft permission, but also for interest. Again, it is not unusual to find current accounts which are 'grouped' for permission - but not for interest. A word with your manager will eliminate costly confusion.Bank Screen Based Systems.Each of the four main clearing banks has its own screen-based system. When managing the overdraft one should ensure that one ismanaging to that banks' value balance - not simply to the 'ledgerbalance' or to the 'cleared balance'. Here, one should avoid

- 81 -81

confusion between balances which are cleared 'for value' (after 1business day) and funds which are cleared 'for fate' (generally after 3 business days). It is not unusual to find major companiescontrolling to the incorrect 15…………………. positions.Significance of the OverdraftProperly managed, the overdraft is a highly cost efficient mode of finance, used in conjunction with longer term finance it also adds considerable flexibility and strategic value.

(http://www.finalysis.ie/artiban1.htm#)

1. Fill in the gaps in the text above with the missing words:

a) liquidityb) marginsc) fluctuationsd) treasurye) facilityf) credit-ratingg) transfersh) receipts

i) investmentsj) financek) managementl) clearingm) surchargesn) quotationso) borrowings

2. Read the following text about bank fraud. For each gap1-12 write one word against the corresponding number. There is anexample at the beginning: 0 – as.

Banks Plan Identity Theft Crackdown By Robert WattsBank and shop staff are to act 0……………….. fraudbusters under a Government-backed scheme to crack down on identity theft due to start in mid-June.Banks and credit card companies are 1………………… closely with variousGovernment departments to share data on criminals and to train staff on how to 2…………………. fraudsters.Participants 3………………….. include the Home Office, the Department of Work & Pensions, the Passport Office, the Metropolitan Police and the DVLA.Bureaux de change, a favourite target for fraudsters, are also expected to be included, and the checking of passports with ultra-violet technology is 4…………………… to become mandatory.Staff will be trained to spot telltale signs that bank statements, utility bills, bank cards and other 5……………….. of ID have been forged.

- 82 -82

Identity theft - a nebulous term for an array of crimes 6……………………fraudsters establish bank accounts, loans and credit cards in thenames of others - is Britain's fastest growing 7………..…….. of fraud.Cifas, the UK's fraud prevention service, 8………………… 53,536 cases of identity theft in 2001 and 74,766 cases in 2002 - a 40 per cent increase.The introduction of "chip and pin" technology, which 9………….…… cardholders to punch in pin numbers in shops and other points of transaction, is 10………………. to reduce credit card fraud substantially.The Association of Payment Clearing Services (Apacs) has 11………………. fears that this will encourage more fraudsters to turn to identity theft 12………………….Sandra Quinn of Apacs said: "The US Attorney admits that identitytheft is 13 ‘……………. of control' in America. These measures are a proactive move by the Government and the finance industry to thwart the fraudsters. It's the first cross-industry 14……………….. of its kind."Barclaycard, which is taking a leading role in the initiative, said that it was working to strengthen the "weak spots" targeted by identity fraudsters, 15………………… the mailshotting of "pre-approved" credit card application forms.June Hale, head of member services for Cifas, said that staff education would go "right up to the boardroom".

(telegraph.co.uk)

3. Read the following text about problems young people have with debt and choose the best word from below to fill in thegaps:

A Generation Unskilled in the Art of BudgetingOne in five callers to the National Debt Line is under 25 and 250,000 of the people who consult Citizens' Advice Bureaux about financial problems each year are under 30."Credit is a way of life to this generation," says Carl Bayliss of National Debt Line, which helps people 1. ________________ their debt problems. "It's 2. ________________ available and can be useful, but only when used responsibly."Two-thirds of the problems younger people have with debt is 3. _________________ to credit cards, store cards, overdrafts, loansand other sorts of easy credit, he says. "Budgeting is a life

- 83 -83

skill but many children never learn how to 4. __________________ it."Much concern has been voiced about student debt. But, while graduates now expect to leave university with debts of about £10,000 each, the 5. ____________________ suggests that students are better able to 6. __________________ their debts than other young people.Far 7. __________________ spending wildly, credit cards representonly two per cent of the average student's debt when leaving university, according to research by Barclaycard. More than 90 per cent of students with Barclaycards are classified as having a"good" credit 8. ____________________, meaning they manage their credit more effectively than the average cardholder.9. _________________, while most 15 and 16-year-olds questioned in a recent NOP survey knew how much a computer game costs, they were unsure how to budget for food, rent and bills. Few had any idea of costs when it 10. ___________________ to heating, lighting, rent and council tax.More than a quarter (26 per cent) believed that, when they moved out of home, one of their three biggest expenses would be going out, while 24 per cent thought they would spend most 11. ________________ clothes - and one in five thought the biggest expense would be their mobile phone bill.According to the Consumers Association, more than 6m families find it difficult to repay their debts. "The only feasible way ofproviding 12. ___________________ to advice on pensions and debt and helping to deliver educational initiatives effectively, is toestablish a National Financial Advice Network to complement private sector capacity," a spokesman says."We strongly support the principle of financial education and think the FSA should devote more resources to it. However, given the legacy of 13. ___________________ in the UK, any educational initiatives would be slow-burning. Until the effects have fed through to the general population, we see no substitute for unbiased, consumer-focused financial advice."When people get into debts, many have no idea of the best way to tackle the problem, he says. Although free help is available fromCitizen's Advice Bureaux and various other debt advice agencies, many people are wrongly encouraged to 14. ____________________ their debts into a single loan, which leaves them with no flexibility to prioritise repayments.Others go to debt management companies, which charge a fee for managing repayments and for distributing the money to creditors.

- 84 -84

This fee often equates to the first monthly payments, which meansarrears continue to spiral.Many debt management companies 15. ____________________ to explain clearly that the first priorities are the mortgage or rent, council tax, utility bills, television licence and loans secured on a property. Failure to service these debts can lead tohomelessness, imprisonment or withdrawal of utility supplies.Other loans and credit or store card payments can often be rescheduled and non-payment results only in a poor credit record,difficulty in obtaining future credit and, at worst, bankruptcy or a County Court order to repay at a level the debtor can afford.Failure to repay hire purchase debts can led to the car or household item being repossessed.

(telegraph.co.uk)

1. a) figure up b) think over c) sort outd) investigate in

2. a) easily b) simply c) plainly d) surely3. a) similar b) associated c) cognate d) related4. a) grasp b) handle c) hold d)exercise5. a) witness b) indication c) evidence

d) data6. a) attend to b) cope with c) live with

d) deal with7. a) of b) to c) away d) from8. a) rating b) estimate c) valuation

d) assessment9. a) In reverse b) In comparison c) In opposition

d) In contrast10. a) arrived b) came c) fell

d) happened11. a) over b) of c) on d) over12. a) access b) approach c) contact d) admission13. a) hurdles b) issues c) dilemmas d) problems14. a) centralise b) consolidate c) compound

d) incorporate

- 85 -85

15. a) fail b) blunder c) miss d) abort

4. Read the following text about electronic moneytransfer. In most of the lines 1-15 there is one extra word. Itis either grammatically incorrect or does not fit in with themeaning of the text. Some lines, however, are correct. If a lineis correct, write CORRECT against the corresponding number; ifthere is an extra word in the line, write the extra word inCAPITAL LETTERS against the corresponding number on your answersheet. E.g. 0 - INSTANTANEOUSLY

00 - CORRECT

000 1 2 3 4 5 6 7 8 9101112

Banks stalling over electronic transfersBy Michael Becket Money transfers between banks are done electronically and could therefore be instantaneously. Yet British banks are still taking at least three and occasionally up to seven days for the transactions.If a weekend intervenes, the transaction take even longer although computers are able to work even on a Sunday. The banks extract the money instantly from the payer's account and, as the latest issue of Which? magazine points out, they put it into a suspensed account for some days to earn them extra interest on the money market.That just means the banks are hanging on to its clients' money, investing it and making an extra £35m an year on the cash, according to the Office of Fair Trading.In Sweden the banks were forced by the government last year to transfer money within a day. It turned out to be quick and cheap to implement. But in Britain customer complaints and the Cruickshank report have had nil effect on banks or politicians. A current hope is to shaving one day off the transaction’s time in the next two years.The Association for Payments Clearing Services, which handles the transactions, is owned by 32 major banks and building societies which use its services and is still used antiquated systems which are the excuse for the delay. On top of this, however, several banks manipulate the system to increase their hold on the cash for another day.Half the banks in the Consumers' Association investigation said they would have like to see electronic transfers speeded up. However, none of them has done anything to improve the system, despite promises three years ago.

- 86 -86

131415

(telegraph.co.uk)

5. Read the text below about commerce on the Internet anduse the words on the right, listed 1-15, to form a word that fitsin the same numbered space in the text. E.g. 0 – infancy.

Commerce on the Internet, although in its 0. _____________, can takemany forms. "Home- shopping" (where 1. _____________ browse "cybermalls" and buy goods through credit cards and electronic cash) will comprise an 2. _____________ $7.2 billion U. S. marketplaceby 2000. Electronic cash, will form the bedrock of Internet 3. _____________, and will 4. ____________, for example, a consumer to download the latest word-processing program or video game rightfrom his or her computer and pay for it with E-cash. E-cash is already being issued by online banks asa 5. _____________ that can be traded for goods and 6. __________ over the Internet. E-Cash is the generic name given to the concept of currencywhich is 7.________ signed using the issuing institution's private 8. _____________ key. The institution withdraws (or otherwise charges the customer), and 9. _______________ transmits the note to the appropriate person. This note can then be electronically 10. _____________ to others as 11. ______________ for goods and services. Banking is also seen as an area that will experience dramatic growth over the Internet. Banks are already involved in electronic commerceby using Automatic Teller Machines, and wire transfers. Many banks are also establishing 12. _____________ on the Internet which will soonenable customers to complete 13. _____________ every banking transaction over the Internet. 14. ______________ issues which are always a concern

0. INFANT1. CONSUME

2. ESTIMATION3. TRANSACT4. ABLE

5. CURRENT6. SERVE7. DIGIT8. CRYPT

9. ELECTRONIC10. NEGOTIATION11. PAY

12. PRESENT13. VIRTUAL

14. SECURE15. SIGN

- 87 -87

in financial transactions will be eventually overcome through the use of encryption or a digital 15. ______________.

(http://www.firstmonday.dk/issues/issue2_10/muscovitch/)

6. COLLOCATIONS.

A. Match the words in the two columns so as to form suitable collocations:

1. clearing2. crossed3. bearer4. bank5. deferred6. dishonoured7. due8. legal9. mortgage10. portfolio11. promissory12. credit

a) managementb) interestc) dated) tendere) notef) loang) vaulth) banki) worthinessj) chequek) billl) securities

B. Now match the collocations you found above with theircorresponding definitions:

1. __________________________ security (such as a bank note) that the issuer considers is legally owned and negotiable bythe person who possesses it

2. __________________________ a room with thick walls and a strong door, which is used to store money or valuable thingsin safe conditions

3. __________________________ condition in which the payment ofinterest is postponed

4. __________________________ a British commercial bank which is a member of a bankers' clearing house, through which cheques are cleared

5. __________________________ degree to which customers are certain to pay debts promptly, degree to which they are worthy of being allowed credit

- 88 -88

6. __________________________ one which the drawee (the debtor on whom it is drawn) has refused to accept, or which the acceptor (the person who has agreed to pay it) fails to pay when it is due

7. __________________________ a document which contains a promise to pay a stated amount of money to a stated person either on a fixed date or when the money is demanded

8. __________________________ one with two parallel lines drawnacross it, usu. by the drawer or his agent, e.g. his bank. This practice lessens the risk of loss by dishonesty

9. __________________________ the date on which some debt, suchas an interest payment or a bill of exchange becomes due to be paid

10. __________________________ the administration of a collection of company shares and other investments that are owned by a particular person or organization

11. __________________________ the form of money in which a person has a right by law to pay a debt, and which the creditor must by law accept in settlement of the debt

12. __________________________ a loan to finance the purchase of real estate, usually with specified payment periods and interest rates. The borrower (mortgagor) gives the lender (mortgagee) a lien on the property as collateral for the loan. The mortgagor's lien on the property expires when the mortgage is paid off in full.

C. Verbs + nouns. Match the following verbs with the nouns in the right-hand column to form appropriate collocations:

1. apply for2. ask for3. bear4. deposit5. audit6. discount7. give8. make out

a) moneyb) noticec) interestd) a chequee) a loanf) an accountg) securityh) a bill

Now use the collocations you found above in sentences of your own.

7. BANK

- 89 -89

A. Word-formation. Fill in the gaps with the corresponding forms of the word bank:

1. High street ________________ have been accused of exploiting small firms.

2. She is currently Hollywood's most ________________ actress

3. His ________________ as a pop star decreased as he got older.

4. She was a successful ________________ by the time she was forty.

5. The company was forced into ________________.

6. The intricacies of international ________________ remained a mystery to him.

7. "Do you think she'll come?" "I wouldn't ________________ on it".

8. She was commissioned to work on a joint program ________________ by the U.S. space agency.

9. The recession has led to many small businesses going ________________.

B. Types of banks. Match the following types of banks with their corresponding definitions:

1.central bank

2.commercial bank /deposit bank / joint-stock bank

3.merchant bank (GB) / investmentbank (USA)

4.savings bank

a) financial institutions that act as suppliers of loans and credit facilities, however they are typically not allowed to take deposits from the general public and have to find other means of funding their operations such as issuing debt instruments.

b) a small container, sometimes in the shape of a pig, which is usedby children for saving money

c) a bank that provides services to a national government, puts the official financial plans of that government into operation, and controls the amount of money in the economy

- 90 -90

5.non-bank bank

6.piggy bank

d) a special kind of banking organisation that has been set upto encourage saving by members ofthe public and to organise the pool of small savings.

e) commercial organisations specialising in the raising of capital for industry, the financing of international tradeby accepting bills of exchange, and in servicing (arranging and

f) as opposed to an investment bank,is a bank whose main job is to receive deposits and negotiate short-term loans.

C. Types of bank accounts. Match the following types of accounts with their corresponding definitions:

1. current account (GB) / demanddeposit (USA)/ checking account (USA)

2. dead account

3. deposit account (GB) / time account (USA)/ notice account (USA)

4. joint account

5. public account

a) a bank account for public money such as those of collectors of taxes, government departments andlocal government authorities

b) one in which money paid in or deposited by a customer earns interest at a rate which varies with the bank’s rate

c) a bank account existing in the names of two or more persons, often husband and wife

d) a bank account into which personal savings are paid and on which the bank usu. Pays a slightly higher rate of interestthan on ordinary deposit accounts

e) a bank account that you can take money from at any time and which

- 91 -91

6. savings account

usually earns little or no interest

f) an account that is no longer at all active

D. Collocations. Use the following words statement, draft,overdraft, holiday, guarantee, rate in combination with bank, and the matchthem with their corresponding definitions:

1. _______________________ an official holiday when banks and most businesses are closed for aday

2. _______________________ a printed record of the money put into and removed from a bankaccount

3. _______________________ the amount of interest that a bank charges, especially the lowestamount that it is allowed to charge, when it lends money

4. _______________________ a cheque payable on demand drawn by a bank on itself and signedby one of its responsible officials

5. _______________________ a formal promise by a bank to a creditor to pay him a sum ofmoney if the debtor fails to pay him by a certain date; a written promise by a bank toopen a commercial credit, subject to certain conditions

6. _______________________ an agreed sum of money which by arrangement a bank allows acustomer to overdraw his account

8. Antonyms. Read the following text about how debts may prevent people from buying property and find words which mean theopposite of the following:

Student debts hurdle is first step to own homeAfter six years of renting, Laura Vallis is keen to buy her own place but first needs to pay off her loans, writes Melanie Wright Like many twenty-somethings who have lived in rented homes for a while, Laura Vallis is keen to get on the property ladder.However, she knows that before she can start saving for a deposit, she must focus on clearing her debts first.Ms Vallis, 26, who works as a freelance television script supervisor, said: "If anyone has a way to make me stop spending money, that would be really useful. I desperately want to clear my debts as they do cost a fair bit each month."Ms Vallis' biggest debt is a £17,000 personal loan with Hamilton Direct Bank, which she took out last year. She said: "I took out this loan as a way of consolidating some of my other debts. The interest charged is 7.9 per cent, which isn't too bad, so my

- 92 -92

monthly payments cost around £330. I have another four years to go before it will be paid off."Many of Ms Vallis' debts stem from her student days, when she wasstudying for a degree in media technology from Southampton Institute. She owes £2,000 in student loans to the Student Loan Company and repays £60 a month. She also has an outstanding balance of £2,500 on an Egg credit card.Even though she has large debts, Ms Vallis has managed to build up her savings but, as she is freelance, she will need to use these to pay her tax bill. She paid £250 a month into a Cahoot savings account from the beginning of August last year until the end of March this year, and now has about £8,000 in this account. Ms Vallis also has £3,500 in two Abbey National mini cash individual savings accounts (Isas).She said: "The money in the Abbey National cash Isas is really there in case of emergencies and the money in the Cahoot account is there for tax, which is one of the things you have to really think about if you are freelance."I do like being freelance because you can choose when and where you want to work. On the other hand, you don't know when money will be coming in and when it won't, which can make life difficult."However, since I started as a freelancer in April last year, I have been lucky to land work very quickly." Prior to being self-employed, Ms Vallis worked as a co-ordinator and before that a production runner, also in the television industry.She now pays £450 a month to rent her home in Wimbledon, south London, which she shares with two friends. Ms Vallis said: "I have been renting in London for the past six years now, four of which I have spent in my current home in Wimbledon."Hopefully, once I have sorted my debts out, I will then be able to concentrate on the best ways I can save for a deposit for a property. I would rather do this than invest in a pension, as I don't see them as particularly good value for money."As far as insurance goes, Ms Vallis has Bupa private medical insurance which she set up when working for a former employer, but she has no income protection or critical illness cover.She said: "At the moment, my main focus is on paying off the money I owe in loans and on my credit card. Once this is done, I can turn my attention to saving properly for a deposit."

- 93 -93

1. running into2. saving3. expanding4. diminish5. settled6. collective7. fall short of8. disregard

9. unsuitably10. financially

disadvantageous11. closed12. own13. is unavailable14. saved up15. inexpensively

- 94 -94


1. Read the following text about reinsurance:

Love on the Rocks

Arguments between insurers and reinsurers over the payment of claims are becoming increasingly acrimonious

A happy marriage needs a bit of give and take. So it was, once, between insurance companies and the reinsurers to which they lay off risk. In good times, insurers bought cover for profitable risk, which strictly speaking they did not need........................ 0 None of this was explicit; nor, after so many years together, did it need to be. The two parties had prenuptial agreements, called reinsurance treaties, but these were deliberately vague. Sometimes they did not even specify the dates on which insurers' premiums were due. Of course, there wereoccasional rows, but these were settled in private.

The increasing fragility of reinsurers has jarred this harmony. Reinsurers have been slow to pay insurers' claims, or have declined to honour claims they consider not to be covered by treaties, to the point of going to court......................... 1 Most shy away from terrorist risk. Many do not want to write cover for medical-malpractice insuranceany more, or, after the recent wave of corporate scandals, for directors' and officers' insurance. Insurers feel betrayed, and say so. At a recent conference Martin South, of Zurich London,

- 95 -95

UNIT FIVEINSURANCE

complained of “absolutely disgraceful treatment” by some reinsurers. “The old-boy way of doing business does not work any more,” says Chris Winans of Williams Capital in New York.

Because eight of the ten biggest reinsurers are European, the bust-up has taken on transatlantic dimensions. Lord Levene, chairman of Lloyd's of London, has been begging American insurance regulators to stop treating Lloyd's as an “alien reinsurer”...................... 2. Lord Levene's pleading has been in vain, even though Lloyd's—a market supplying both insurance and reinsurance—is in far better shape than most reinsurers are. According to John Oxendine, Georgia's insurance commissioner, the reason is “deep concern” about the health of European reinsurers.

....................... 3. Charles Cantlay of Aon, an insurance broker, estimates that reinsurers have lost $200 billion in capital since the terrorist attacks of September 11th 2001. Only about $30 billion in new capital has come in, much of it through new companies established in Bermuda. Reinsurers will have to cover about half of the insurance claims related to September 11th. The cost of this is anyone's guess: maybe $25 billion, maybe twice that. The value of their equity investments has shrivelled. And most of them have to deal with a legacy of sloppyunderwriting when the market was soft.

Judged, and found wantingAs a result, many top reinsurers have lost their AAA credit ratings in the past few years. One exception is General Re, a subsidiary of Warren Buffett's Berkshire Hathaway. Rating agencies' judgements matter more to reinsurers than they do to other financial firms, including insurers. ..................... 4.

DEVK, a German insurer, has large outstanding claims against it. ast month Munich Re, the world's largest reinsurer, admitted a loss of euro2.2 billion ($2.2 billion) in the last quarter of 2002. It made a profit in the year, of euro1.1 billion, mainly because it sold stakes in other companies. …………….. 5. Swiss Re, the world number two, lost SFr91m ($58m) last year and cut its

- 96 -96

dividend. Although Swiss Re is not seeking new capital, rating agencies have a “negative outlook” on the firm.

Scor, a French reinsurer, and General Re also made losses in 2002. Despite announcing a profit, reinstating its dividend and promising to do all it could to defend its credit rating on April14th, Germany's Hannover Re, the world's fifth-biggest reinsurer,suffered a downgrade by S&P the following day.

However, the most troubled big reinsurer is another German company, Gerling Re. On being marked down by S&P in early February to below investment grade, it ceased to be rated by the agency. Gerling Re stopped writing new property-and-casualty business last autumn, but it must still honour its existing obligations. ...................... 6 When Mr Buffett wrote to his shareholders recently that a large (unnamed) reinsurer had all but ceased paying claims and “owes many billions of dollars to hundreds of primary insurers who now face massive write-offs”,he meant Gerling Re. One of the insurers out of pocket, notes William Yankus of Fox-Pitt, Kelton, an investment bank, is GEICO,a subsidiary of Berkshire Hathaway. It is owed an estimated $47m.

(http://www.economist.com)

2. Choose the best sentence from below to fill each of the gaps in the text above. E.g. 0 – G Do not use any letter more than once. There is one extra sentence.

A. As reinsurers cannot take on much new business and irritate their clients by refusing to pay old claims, more insurers will seek retribution.

B. Despite a “hard” market (i.e., rising prices), reinsurers are struggling.

C. Because the reinsurance industry is largely unregulated, rating agencies are regarded as the most important arbiters ofreinsurers' financial health.

D. Alien reinsurers are required to hold collateral equivalent to100% of gross liabilities, whereas domestic reinsurers have tofund their liabilities only on a net basis.

- 97 -97

E. Its results triggered another downgrade by Standard & Poor's (S&P), a credit-rating agency . To raise badly needed capital,it issued a euro3 billion subordinated bond on April 9th.

F. They are also choosier about the risks they take on.

G. In bad times, reinsurers reciprocated by paying even questionable claims.

H. This has perhaps been most painful for the two market leaders,long regarded as the epitome of financial strength.

3. Read the following text about life insurance:

Life Insurance--How Much is Enough? The Needs Analysis approach incorporates an evaluation of what may be defined as a family's most important financial obligationsand goals. This includes insurance coverage for mortgage debt, college expenses, future family income, and creating liquidity for meeting future estate tax liabilities.

Mortgage Debt The first point needing consideration is whether your life insurance proceeds are sufficient to help pay the remaining mortgage on your home. If you are carrying a large mortgage, you may need a sizeable amount. If you own a second home, the mortgage on that home also needs to be factored into the formula.

College Expenses Many people want life insurance proceeds large enough to cover their children's college expenses and possibly graduate school. The amount needed can be roughly calculated by matching the ages of your children, and the anticipated return from investing the life insurance proceeds during pre-college years, against projected college costs adjusted for inflation. This calculation should be revised periodically as your children get closer to college age. Keep in mind, it is impossible to project inflation and earnings with any measure of precision for many years into the future. Therefore, it may be a good idea to be as conservative as possible when estimating long-term investment gains.

- 98 -98

Continuing Income for Your Family The amount of income you will need to help provide for your surviving spouse and dependents will vary greatly according to your other assets, retirement plan benefits, Social Security benefits, age, health, and your spouse's earning power. Many surviving spouses may already be employed or will find employment, but their income is based on education, training, andexperience. Your spouse's income alone, may be insufficient to cover the monthly expenses of your family's current lifestyle. Providing a supplemental income fund will help your family maintain its standard of living.

Estate Taxes Life insurance has long been recognized as an effective method for creating liquidity at death so estate taxes can be paid and asset transfers to future generations can be maximized. However, this use of life insurance requires qualified legal expertise to ensure the proper result.

Existing Resources If your current assets and retirement plan death benefits are sufficient to cover your financial needs and obligations, you maynot need additional life insurance for these purposes. If, however, they are not, the difference between your total assets and your total needs may be funded with life insurance.

There are many factors that should be considered when completing a Needs Analysis. In addition to the areas already touched upon, some other questions to be addressed are: How much will Social Security provide and for how long?; How do you "inflation-proof" your family income, so the real purchasing power of those dollarsdoes not decrease? ; What is the earning potential of your surviving spouse?; How often should you review your Needs Analysis?; How can you use life insurance to help provide retirement income you can't outlive?; How do you structure your estate to reduce the impact of estate taxes?; Which assets are liquid and which would not be reduced by a forced sale?; Which assets would you want your family to retain because of future growth possibilities or sentiment?

(http://us.hsbc.com/personal/insurance/articles/howmuchisenough.asp)

- 99 -99

4. Read the following statements and decide whether they are trueor false, according to the text above:

1. The more endebted you are, the more attention you should give to the evaluation of insurance formulas.

T / F

2. Second thoughts are useless when investing in your children’s future. T / F

3. Your family’s standard of living will not change after your death if your surviving spouse stays employed.

T / F

4. Your heirs can but benefit from the counselling a good expert is ready to offer. T / F

5. People who have plenty of assets do not need extra funding.T / F

6. The completion of an Insurance Needs Analysis requires specialattention as to how much the purchasing power of your currencyalters in time. T / F


1. Read the following text about insurance tips:

Your Home is Your Castle--Insurance Tips While you may be thinking "I'm OK, I have insurance," it should be noted that many times, people don't have enough 1...................... . It is important to consider the appreciation in the value of your 2 ..................... and valuables and how much it would cost you to replace your home. To get the full value of having homeowners insurance you should consider the following:

Start by documenting your possessions. Videotape each room and if that's not possible, photograph them instead. You

- 100 -100

should write a list of all your credit card numbers and the serial numbers on your appliances, collect all important papers and 3 .................... and store them in a safe place.

Buy enough insurance to rebuild your home. If you own a 4..................... that covers only its market value, you may not receive the amount you'd actually need to replace your home. You should consider guaranteed replacement value coverage and be sure the 5................... includes the expenses you could face tosatisfy any mandated building code upgrades. You also want enough coverage to be able to replace your possessions. Somebasic policies would only cover approximately what you'd getif you sold your possessions in a distress sale, hardly enough to comparably replace them.

Apply for discounts. Check with your 6 ................... about available discounts such as: installing smoke or installing a sprinkler and fire alarm system to name just two. There may also be a 7 .................. offered if youare retired.

Get covered even if you are a renting tenant. A landlord's policy only 8 ................... his or her structure, not your possessions. A relatively 9 ..................... typical renter's policy can protect you from losing everything you own.

In closing, the main thing is to act now; finding and acquiring the right policy to fill your needs will protect what you've worked hard for and help to give you 10................... .

(http://us.hsbc.com/personal/insurance/articles/castle.asp)

Fill in the gaps in the text above with the missing words:

p) appraisal q) coverager) belongingss) inexpensive t) receipts

u) discountv) piece of mind w) protectsx) policyy) insurer

2. Read the following text about health insurance. For each gap 1-12 write one word against the corresponding number. There is an example at the beginning: 0 – reality.

- 101 -101

Your boss doesn’t have to provide health insurance

The first 0 ................... of health insurance is you do nothave a right to it. There are no 1………………or federal laws requiring private employers to offer health benefits to their employees.“2.................. a number of valid reasons employers are notmandated to offer or provide health insurance for their employees,” explains Peter Bigelow, CLU, employee benefits specialist with The Foresight Group. “It is 3. .............. knowledge, however, that most employers though not mandated to do so offer insurance to their employees for a variety of reasonsrelated to competition and smart business practice.”If you have benefits through your employer and you4 ..................... or lose your job, don't assume youwill be able to pick up the identical coverage for the sameprice. Similarly, don't expect your 5................... employer to extend your benefits beyond your last day at work. There is no "grace period" during which you're still 6..................... .If you do 7 ................... your employer-sponsored benefits, there is a federal plan called COBRA (Consolidated Omnibus Reconciliation Act) that could 8....................... you with a short-term safety net. Another federal law that offers some protection to workers 9.................... a short-term lapse in their coverage is HIPAA (Health Insurance Portability and Accountability Act).

3. Read the following text about auto insurance and choose the best word from below to fill in the gaps:

Why Auto Insurance Makes Sense Insurance, in all its varied forms, is quite simply a method for 1._______________ risk. In order to plan an effective insurance program, you need to consider what risks you are 2.___________ toand how financial loss would affect you. For each 3._____________risk exposure, the key elements are the severity and frequency ofloss. Evaluating Risk Some risks are so small that we often decide to accept full responsibility for any potential loss. In insurance language, we

- 102 -102

"self-insure" for risks we choose to accept. For example, it is rarely 4.______________ to carry collision coverage on a ten-year-old vehicle. Since collision coverage generally pays up to the 5._______________ cash value, less the deductible, and since a ten-year-old car may have little current fair market value, it is common in such cases to self-insure. (In making this choice, we also assume full responsibility for any damage to the vehicle we might 6.______________ ourselves.) Risk Transfer and Risk Sharing In contrast, the monetary risk is much larger for damage or injury as a result of an auto accident in which you are 7.____________ fault, or when your car is stolen. Buying insurance is the process of transferring risk that you cannot afford, or choose not to accept. Since few of us could afford to buy another car in the event of 8._____________ or accident, we typically transfer that risk to an insurer by purchasing an automobile 9.________________. However, even in situations of risk transfer, it is common to share some of the risk. For example, the deductible on an automobile, health insurance, or homeowners policy is a form of risk sharing—we accept responsibility for a small 10.______________ of the risk, while transferring the bulk of therisk to the insurer. Decision-Making How do you decide which risks to retain (be responsible for) and which to 11.______________? The following diagram offers a framework for evaluating risk in terms of severity and frequency of loss:

While this framework is best viewed with considered judgment, it provides a starting point to help make important insurance decisions, such as: Should you insure your car? What type of insurance do you need? How much 12.______________ should you purchase?

- 103 -103

This type of cost-benefit analysis can be applied to all types ofrisk exposure—from auto accidents to medical concerns to homeowners' issues. Remember, the fundamental 13.______________ behind all forms of insurance is determining what risks can be transferred (i.e., insured) on a cost-effective basis. (http://us.hsbc.com/personal/insurance/articles/whyauto.asp)

1. a) handling b) examining c) utilizingd) trying

2. a) exhibited b) presented c) exposedd) disclosed

3. a) available b) potential c) imaginabled) possible

4. a) useful b) time-saving c) cost-effectived) successful

5. a) original b) natural c) factual d) actual6. a) create b) cause c) occasion d) induce7. a) in b) to c) at d) under8. a) crime b) burglary c) swindle d) theft9. a) policy b) politics c) program d) plan10. a) portion b) piece c) quantity

d) quota11. a) transmit b) translate c) transfer

d) transport12. a) coverage b) security c) allowance

d) guarantee13. a) reason b) rational c) rationalisation

d) rationale

4. Read the following text about whole life insurance. Inmost of the lines 1-15 there is one extra word. It is eithergrammatically incorrect or does not fit in with the meaning ofthe text. Some lines, however, are correct. If a line is correct,write CORRECT against the corresponding number; if there is anextra word in the line, write the extra word in CAPITAL LETTERSagainst the corresponding number on your answer sheet. E.g. 0 –inthe case of ONE death

00 – CORRECT Whole Life Insurance-- Cash Value for Your Dollar

- 104 -104

000 1 2 3 4 5 6 7 8 910111213

1415

Whole life insurance provides not only security from financial hardship in the case of one death, but also a cash value component of the policy as well. Under a cash value live insurance policy premium payments pay thecost of pure insurance coverage first, including the ekspenses and mortality factors of the insurance company; "leftover" dollars are then accumulated by the company to build the cash value of the policy. In adition to cash value buildup in the policy, some insurance companies may provide whole life insurance policyholders with dividend payments, the result of lower expenses, lower mortality rates and higher company investment results then were predicted when premiums were set. Other whole life insurance feature is predictability of expense: Premium amounts payable at policy inception will not change. The higher premium charged for a whole life policy helps to keep the premiums level over time compared to the premiums for term insurance which increase as insured ages. A guarantee of insurability comes with any whole life insurance policy. One initial evidence of insurability has been provided bythe individual to be insured, and as long as premium payment responsibilities are met, the insured is guaranteed coverage for life, in accordance with the terms of the policy. An Evidence of insurability will never be necessary again, as long as the original policy remains on force. Final feature to consider is the value of whole life insurance asa "creditor," if necessary. Funds may be borrowed against the cash value of the policy at all time.

(http://us.hsbc.com/personal/insurance/articles/shortcourse.asp)

5. Read the text below about life insurance basics and use the words on the right, listed 1-15, to form a word that fitsin the same numbered space in the text. E.g. 0 – loved.

- 105 -105

Many of us buy life insurance, because we want tomake sure our 0......... ones remain 1. ............ secure after we die. For those interested in estate planning, cash 2. ................, wealth transfer and estate tax liquidity, life 3. .............. can be a tool to achieve those goals as well.There are many 4. ............ when it comes to life insurance. Policies are now 5. .............from more than 2,000 life insurance companies in the United States, as well as from banks and other financial institutions. Before purchasing a life insurance policy, you should consider your financial situation and the standard of 6. .......... you want to maintain for your 7. ............. or survivors. For example, who will be responsible for your funeralcosts and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage 8. .............., or college?You should reevaluate your life insurance policies 9. ............. or whenever you experience a major life event such as marriage, divorce, the birth or 10. ............ of a child, or purchase of a major item such as a house or business. 11. ............. put, term life insurance provides death benefit protection for a specifiedperiod of time (for instance, you might buy a 10-year term policy). Generally speaking, if you're looking for 12. ........... for a short period oftime, term life makes sense. If you are interested in using the policy as a form of 13. ............., consider a permanent life insurance policy. 14. ............ of the type of life insurance you buy, most policies require you to meet certain medical criteria. Similar to annual 15. ............ term and convertible term, whole life policies stretch outthe cost of insurance over a longer period of time.

0. LOVE1. FINANCIAL2. ACCUMULATE3. INSURE4. CHOOSE5. ATTAIN

6. LIVE7. DEPEND

8. PAY9. ANNUAL

10. ADOPT

11. SIMPLE

12. COVER

13. SAVE14. REGARD

15. NEW

- 106 -106

(http://Insure.com/)

6. COLLOCATIONS.

A. Match the words in the two columns so as to form suitable collocations:

13. abandonment14. advance15. authorised16. binding17. bodily18. seasonal19. blanket20. risk21. loss22. construction23. professional24. insurance

a) liabilityb) clausec) premiumd) controle) bondf) insurerg) authorityh) policy i) insurancej) managementk) injuryl) risk

B. Now match the collocations you found above with theircorresponding definitions:

13. __________________________ a term that refers to physical injury, sickness, or disease, or death resulting therefrom. In some jurisdictions "bodily injury" includes emotional injury.

14. __________________________ contract covering multiple items of property as a group.

15. __________________________ downpayment on what will bethe final premium, in policies where the final premium is subject to audit.

16. __________________________ a property policy provisionthat stipulates that the insurer need not accept any damagedproperty that the insured chooses to relinquish.

- 107 -107

17. __________________________ the process of handling pure risk by way of reduction, elimination, or transfer of risk, with the latter commonly achieved through insurance.

18. __________________________ an employee granted permission by a state to sell specific lines of insurance within that state.

19. __________________________ actions to reduce the frequency or severity of losses by installing locks, burglaror fire alarms and sprinkler systems.

20. __________________________ the possibility of loss or damage that is present only during certain parts of the year.

21. __________________________ the document containing thecontract between the insured and the insurer which defines the rights and duties of the contracting parties.

22. __________________________ a form of errors and omissions insurance, sometimes called "malpractice" coveragefor errors alleged against those in the healing and legal professions.

23. __________________________ the right extended to an agent by an insurer to provide insurance, usually on a temporary basis, until a policy can be written.

24. __________________________ guarantee of the owner of abuilding under construction that it will be completed; if the contractor cannot finish the work, the insurer is obligated to see that the work is performed

C. Verbs + nouns. Match the following verbs with the nouns in the right-hand column to form appropriate collocations:

9. incur10. sue sb for11. renew12. cover by13. break14. give

a) commissionb) a contractc) damagesd) a claime) an evaluationf) losses

- 108 -108

15. include16. be paid on17. settle18. carry out

g) a policyh) coveri) insurancej) a clause

Now use the collocations you found above in sentences of your own.

7. INSURE, PREMIUM

A. Word-formation. Fill in the gaps with the corresponding forms of the word insure:

10. She _________ herself against car theft.

11. This _________ won’t cover burglary.

12. An ___________ is the person or company that contracts to indemnify losses for a premium.

13.Without an __________ interest, an __________ company will not issue a policy.

14. The acceptability of an insurance applicant is known as __________.

15. The person, group, or property for which an insurance policy is issued is called an ___________.

16. ___________ means the sharing of all or part of a large insurance risk by asking other insurance companies to cover part of it in return for part of the premium.

17. Lloyd’s of London acts as a ___________ for other insurance companies.

18. A risk of this size has to be __________.

19.Making no financial preparation for meeting losses is called __________.

B. Types of Insurance. Match the following types of insurance with their corresponding definitions:

7.Motor Vehicle Comprehensive Insurance

8.Social Insurance

9.Travel

a) insurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities.

b) Insurance that pays a lump sum benefit to the insured in the event of his/her death

- 109 -109

Insurance

10. Trauma Insurance

11. Term insurance

12. Disability Insurance

13. Home Building Insurance

14. Self-Insurance

15. Permanent insurance

16. Life Insurance

c) Insurance that pays a lump sum to the insured for heart attack, stroke, and certain other acute and chronic conditions.

d) Insurance to cover you while you aretravelling against overseas hospitaland medical expenses, cancellation expenses, loss of luggage, travel delay, legal expenses, injury, loss of income, personal accident and personal liability, etc.

e) Insurance that covers an owner occupier or a landlord for damage tobuildings and improvements on their land such as fences, shed or garage;cover may include loss or damage caused by fire, lightning, explosion, earthquake, theft, collision, storm. rainwater etc.

f) Insurance that covers the owner of amotor vehicle against damage or total loss either through being written off in an accident or being stolen and unrecovered; it also covers the owner for third party property liability due to accidents

g) Insurance that provides protection for a specific period of time; it pays a benefit only if you die during the term

h) Insurance that provides lifelong protection; as long as you pay the premiums, the death benefit will be paid.

i) Financial preparations made by the company itself to meet pure risks byappropriating sufficient funds in advance to meet estimated losses, including enough to cover possible losses in excess of those estimated.

j) Compulsory insurance legislated to provide minimum economic security for large groups of people,

- 110 -110

particularly those with low incomes;it is primarily concerned with the costs and loss of income resulting from sickness, accidental injury, old age, unemployment, and the premature death of the head of a family.

C. Types of premium Match the following types of premiumswith their corresponding definitions:

1. Earned Premium

2. Basic Premium

3. Written premium

4. Gross Premium

5. Return Premium

6. Deposit/Provisional Premium

7. Unearned Premium

8. Short Rate Premium

a.A portion of the premium returnedto a policy owner as a result of cancellation, rate adjustment, ora calculation that an advance premium was in excess of the actual premium.

b.The premium required for issuing a policy for a period less than its normal term.

c.That portion of the written premium applicable to the unexpired or unused part of the period for which the premium has been paid.

d.The premium paid at the inceptionof a contract which provides for future premium adjustments.

e.The amount of the premium that has been "used up" during the term of a policy.

f.The net premium plus operating expenses, commissions and other expenses.

g.The total premiums on all policies written by an insurer during a specified period of time, regardless of what portionshave been earned.

h.A fixed cost charged in a retrospective rating plan; a percentage of the standard

- 111 -111

premium designed to give the insurer the money needed for administrative expenses and the agent's commission plus an insurance charge.

8. Synonyms. Read the following text about the importanceof insurance for business owners and find words which mean the following:

1. essential2. hidden3. acquired4. work5. equates6. possessions

7. planned8. in case9. include10. marriage

partner11. down-to-earth12. provide funds

Insurance Is Important For Business Owners

By MICHAEL J. McDERMOTT

People in all walks of life need various types of insurance at different times, but the need for insurance is particularly acuteamong entrepreneurs and business owners. If you're like most people, however, your insurance policies are tucked away somewhere gathering dust. The last time you looked at them was probably the day you received them--and how carefully did you read them then?No need to feel guilty. After all, it's human nature not to dwellon our own mortality, and there's certainly an implication of that in any discussion of insurance, especially life insurance.You don't have to feel guilty, but you do have to take some stepsto make sure your insurance coverage still meets your needs--bothpersonal and business. It's quite possible that your needs have changed in the years since you purchased the policies, and the longer that period of time, the more likely it is you'll have to take some action.

- 112 -112

Reviewing your insurance coverage should be a regular part of your financial housekeeping chores, but it doesn't have to be a particularly difficult or time-consuming task if you break it down into four simple areas. Ask yourself the following the questions:

Do I have the right amount of coverage? Do I have the right types of policies? Am I paying the right price?

In a nutshell, the personal life insurance coverage you need equals the amount of money your family will require to meet all living expenses after your death, minus any continuing income or assets that can be used for that purpose. If you are in business with a partner, you may also have partnership insurance designed to pay your survivors fair market value for your share of the business and pass sole ownership of the business to the survivingpartner in the event of one partner's death.Typically, your calculations for life insurance coverage should encompass normal living expenses (mortgage or rent, health care, food, clothing, taxes, etc.) over the life expectancy of your spouse and your children's expenses (including education) throughcompletion of college. Subtract from that the expected earnings of a working spouse, Social Security survivor's insurance, any pension benefits your spouse might receive and any assets you have designated for this purpose.If your family or income--or both--have grown since you originally purchased your policy, the figure you come up with maybe quite high. An upper middleclass business owner in his or her late 30s to late 40s with a spouse of similar age and a couple ofkids could be looking at a figure between $1 million and $2 million.The worst thing you can do is panic and do nothing. The prospect of filling a million-dollar insurance gap may simply not be realistic given your current circumstances, but it is important that you take some action. Start by scaling back your projections. For example, use a smaller number when calculating your spouse's life expectancy and figure on your children taking out student loans, qualifying for some financial aid and maybe working part-time to help finance their college educations.

(http://www.busop1.com/insure.html)

- 113 -113


1. Read the following text about INCOTERMS:

International Commercial Terms (INCOTERMS)

- 114 -114

UNIT SIXINTERNATIONAL TRADE

The INCOTERMS (International Commercial Terms) is a universallyrecognized set of definitions of international trade terms, suchas FOB, CFR and CIF, developed by the International Chamber ofCommerce (ICC) in Paris, France. It defines the trade contractresponsibilities and liabilities between buyer and seller. It isinvaluable and a cost-saving tool. The exporter and the importerneed not undergo a lengthy negotiation about the conditions ofeach transaction. Once they have agreed on a commercial term likeFOB, they can sell and buy at FOB without discussing who will beresponsible for the freight, cargo insurance, and other costs andrisks.

EXW - Ex Works....named place The seller “delivers” when he places the goods at the disposal ofthe buyer at the seller’s premises (or other named place) not cleared for export and not loaded on any vehicle. This is the minimum obligation for the seller. The buyer bears all costs and risks involved in taking the goods from the seller’s premises. Ifthe parties wish the seller to be responsible for the loading of the goods on departure and to bear the risks and all of the costsof such loading, this should be made clear in the contract of sale.

FCA - Free Carrier....named place“Free Carrier” means that the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. Delivery can occur at the seller’s premises or at the maincarrier’s terminal. If at the seller’s premises, the seller is responsible for loading. If at any other place, the seller is notresponsible for unloading.

FAS - Free Along Side Ship....named port of shipment“Free Along Side Ship” means, that the seller delivers when the goods are placed alongside the vessel at the named port of shipment. This means, that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. This requires the seller to clear the goods for export.

FOB - Free on Board....named port of shipment“Free on Board” means that the seller delivers when the goods pass the ship’s rail (or truck/vessel/airplane) at the named portof shipment. The buyer bears all costs and risk of loss of or

- 115 -115

damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

CFR or C&F - Cost and Freight....named port of destination“Cost and Freight” means, that the seller delivers when the goodspass the ship’s vessel (or truck/vessel/airplane) at the named port of shipment. The seller bears all costs and freight necessary to bring the goods to the named port of destination, but the risk of loss of or damage to the goods, as well as any other additional costs due to events occurring after the time of delivery, are on the buyer, not the seller. The CFR (or C&F) requires the seller to clear the goods for export.

CIF - Cost, Insurance and Freight....named port of destination

“Cost, Insurance and Freight” means that the seller delivers whenThe goods pass a ship’s rail (or truck) at the named port of shipment. The seller must pay the costs and freight necessary to bring the goods to the named port of destination, but the risks of loss of or damage to the goods, as well as any other additional costs due to events occurring after the time of delivery, are on the buyer following delivery, not on the seller.In CIF, the seller also has to procure marine insurance against the buyer’s risk of loss of or damage to the goods during the main carriage. The seller therefore contracts for the insurance and pays for the insurance permium. This only requires the sellerto obtain minimum cover.

CPT - Carriage paid to....named place of destination“Carriage paid to” means that the seller delivers the goods to the carrier nominated by him but the seller must, in addition, pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any other costs occurring after the goods have been so delivered.

CIP - Carriage and Insurance paid to....named place of destination“Carriage and Insurance paid to” means that the sellerdelivers the goods to the carrier nominated by him but theseller must, in addition, pay the cost of carriage necessaryto bring the goods to the named destination. This means thatthe buyer bears all risks and any other costs occurring

- 116 -116

after the goods have been so delivered. In “CIP”, theseller also has to procure insurance against the buyer’srisk of loss of or damage to the goods during the carriage.The seller therefore contracts for insurance and pays theinsurance permium.

DAF - Delivered at Frontier....named place“Delivered at Frontier” means that the seller delivers the goods when they are placed at the disposal of the buyer on the transport conveyance, unloaded, cleared for export, but not cleared for import at the named point and place of the frontier. This is before the customs porter of the adjoining country. This is typically used in rail carriage. The frontier in question mustbe defined precisely by naming the point and place in the term.

DES - Delivered ex Ship....named port of destination“Delivered ex Ship” means that the seller delivers when the goodsare placed at the disposal for buyer on board the ship, not cleared for import at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to named port of destination before discharging. If the parties wish the seller to bear the cost and risk of the discharging of the goods, then the DEQ term should be used .

DEQ - Delivered ex Quay....named port of destination“Delivered ex Quay” means that the seller delivers when the goodsare placed at the disposal for buyer, not cleared for import on the wharf or dock at the main port of destination. The seller bears the costs and risks involved in bringing the goods to the named port of destination and discharging goods onto the wharf. The buyer is required to clear the goods for import and to pay all charges on import. Ifr the parties wish to extend the seller’s obligations, risks and costs of the handling of the goods from the quay to another place inland (eg a terminal or warehouse), then the DDU or DDP terms can be used.

DDU - Delivery Duty Unpaid....named place of destination “Deliver Duty Unpaid” means that the seller delivers thegoods to the buyer, not cleared for import, and not unloadedfrom any means of transport at the named place ofdestination. The seller has to bear the costs and risks

- 117 -117

involved in bringing the goods to the point, with theexception that, where applicable, any duties payable andcustom formalities for the import into the country ofdestination are the responsibility of the buyer. This dutyhas to be born by the buyer as well as any costs and riskscaused by affiliated to clear the goods for import in time.

DDP - Delivered Duty Paid....named place of destination “Delivery Duty Paid” means that the seller delivers the goods tothe buyer, cleared for import, and not unloaded from any arrivingmeans of transport at the named place of destination. The sellermust pay all costs and risks involved in bringing the goods tothat point and where applicable, any duty for the import in thecountry of destination.

(http://www.alphatrans.com)

2. Read the following statements and decide whether they aretrue or false, according to the text above:

1. FAS (+ named port of shipment) means that thebuyer has to bearall costs, export clearance and risks of loss or of damage to thegoods from that moment. T / F

2. FOB (+named port of destination) means that the deliveryof goods to the named port of destination (discharge) at theseller's expense. Buyer is responsible for the cargoinsurance and other costs and risks.

T / F

3. CIF (+ named port of destination) means that means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyer's premises, which may include the import customs clearance and payment of import customs duties and taxes at the buyer's country, depending on theagreement between the buyer and seller.

T / F

4. DAF (+ named place) means that the delivery of goods tothe specified point at the frontier at seller's expense.Buyer is responsible for the import customs clearance,

- 118 -118

payment of customs duties and taxes, and other costs andrisks. T / F

5. DDU (+nemed place of destination) means that the deliveryof goods and the cargo insurance to the final point atdestination, which is often the project site or buyer'spremises, at seller's expense. Buyer assumes the importcustoms clearance and payment of customs duties and taxes.The seller may opt not to insure the goods at his/her ownrisks. T / F

6. DDP (+ named place of destination) means that the delivery ofgoods on truck, rail car or container at the specified point(depot) of departure, which is usually the seller's premises, ora named railroad station or a named cargo terminal or into thecustody of the carrier, at seller's expense. The point (depot) atorigin may or may not be a customs clearance center. Buyer isresponsible for the main carriage/freight, cargo insurance andother costs and risks. T / F

3. Read the following text about internationalfactoring:

International Factoringby RAY PEREIRA

1. _______________________ As the global economy has becomeincreasingly competitive, companies are finding that they must bemore flexible with customers to maintain and grow sales. Beingable to offer international customers better financing terms isnow an important part of any sales package. Since payment fromcompanies in other countries involves elements of uncertaintythat are unlike those faced with domestic companies, credit riskbecomes more of an obstacle. Selling on open account, which maybe best from a marketing and sales standpoint, is fraught withdanger. In particular, you may not be able to discover orunderstand the customer’s financial situation and the economicsituation of the country in which the customer is located. Also,collecting from foreign accounts is every bit as difficult as youimagine it to be. Cash-in-advance terms are more often placing

- 119 -119

you at a competitive disadvantage, as open account terms withextended dating are becoming more common despite the dangers.Other challenges emerge as customers prefer to trade in localcurrencies. In addition, most domestic banks will not provide thenecessary financing on export receivables. This remains acritical issue as these receivables are now utilized as afinancing tool in international trade programs. However, there is an attractive alternative: internationalfactoring. Many exporters have added factoring companies to theirlist of financial partners in an attempt to incorporateinternational sales and financing into their objectives.2. _______________________ International factoring may be definedas the sale of assignments of short-term (generally 120 days orless) accounts receivable arising from an international sale ofgoods or services. There are four parties involved in atransaction: the exporter (seller), the US factor (exportfactor), the foreign factor (import factor) and the customer(buyer). Transactions are somewhat more complex than traditionaldomestic factoring since there are a number of parties, dependingon how many countries there are in which the seller conductsbusiness.Although international factoring has become more visible inrecent years, it is not new. Factoring has been used in one formor another since the fifteenth century when merchandise—such asfish, fur and timber—was exported to England with agents fromLondon making loans and advances to these sellers to help provideworking capital. The nineteenth century was a period ofresurgence for factoring, but it was centered more in the USrather than Europe. Beginning in the 1970s, a number of countriesbegan enacting legislation to open the doors to opportunity forcross-border trade activities, and once again the factoringindustry was revived as an alternative financing tool. In 1995,$23 billion in international trade was covered by factors, up 17percent from a year earlier. Two of the top US factors withspecialty units for international factoring are Bank of AmericaCommercial Finance/Factoring and CIT Group/Commercial Services.Some of the major factors are making export business a priority.As only one example, Bank of America Commercial Finance/Factoringwas awarded the President’s “E” Award in 1994 for its excellencein export service, and it continues to expand internationally byopening offices in Hong Kong and London.

- 120 -120

3. _______________________ The international factoring businessinvolves networks similar to the use of correspondents in thebanking industry. Factors Chain International is the largest ofthese global networks of factoring organizations. About half theworldwide factoring transactions are through the membercompanies. Global networks enable the export factor to give theseller a working financial partner to engage in factoring inanother country. The member companies in each country speak thelocal language, keep current on who is creditworthy, and areready to act with the export factor as the seller’s overseasfinancial representative. This means that the seller can dobusiness abroad as if it were next door to the customer.The export factor will work directly with the import factor torepresent the seller. Under the supervision of the export factor,the import factor will manage the seller’s collections and coverthe credit risk.4. _______________________ There are basically three elements ofservice offered by international factoring companies:

1. Managing the receivable, where an accounts receivablemanager handles collections and provides reporting andbookkeeping services. Typically, the seller “assigns” ordersto the factor and the buyer pays the import factor. Theexport factor guarantees the payment for the order (minuscharge-backs, defects, and other things that may go wrongthat are beyond the factor’s control).

2. Furnishing credit protection on the receivable andestablishing credit lines. Usually, if the order is notapproved for factoring, the seller can still sell to thebuyer, but collection is no longer guaranteed by the exportfactor. For approved orders, the factor collects the paymentfor the order and then pays the seller, minus the factor’sfees, which can include an annual fee plus a commission oneach sale.

3. Lending against receivables. Interest rates vary and themost common loan is no greater than 90% of the value of thereceivables. The seller must usually have a minimum ofworking capital and other qualifying criteria.

5. _______________________ The seller will sign a factoringagreement with the US factor (export factor). Under thisagreement, the seller’s accounts receivable are assigned to the

- 121 -121

US factor and the seller is covered against credit losses, up to100 percent of the approved credit. The export factor selects anappropriate import factor to act on the seller’s behalf overseaswith the export factor’s supervision. In the meantime, the importfactor overseas investigates the credit standing of any localcustomer to whom the seller wishes to sell goods.When approved, credit lines are established so the seller’sforeign customer can place orders for goods on open accounttrading terms. Once authorized sales take place, the sellerbecomes eligible for funding. The import factor handles the localcollection and payment of the accounts receivable.During all stages of the transaction, records are kept for theseller and reports are made to give the seller important, timelyinformation on such details as delayed deliveries, the wrongmerchandise sent to the wrong place, or any other discrepancycausing delays in payment.6. _______________________ Typical US sellers who factor aremanufacturers, distributors, wholesalers or service companieswith sales ranging from $5 million to $200 million. Usually theexport sales minimum is $5 million. International factoring isalso becoming a financing tool for larger corporations, such asFortune 1000 companies, who utilize factoring to manage theirbalance sheets.International factoring is coming of age among US exporters and there are enormous opportunities to capitalize on the economic changes. This alternative financial tool allows the exporter to compete and increase global sales without increasing global risk.

(http://www.fita.org/aotm/0100.html)

4. Fill in the gaps with the appropriate subheadings frombelow:

a) A Worldwide Factoring Networkb) How It Worksc) The Viable Financing Alternatived) Seller Profilee) International Factoring Comes into its Ownf) Services Offered


- 122 -122

1. Read the following text about the European Union and protectionism:

EU is 'Most Protectionist Trade Bloc in the World' by AMBROSE EVANS-PRITCHARD

The European Union is the most protectionist trade bloc in theworld and tops the "hypocrisy list" for blocking exports frompoor and 1.________________ countries, according a reportreleased by Oxfam International yesterday.While the EU imposes fewer tariffs on Third Word products thanthe US, it uses a variety of other stealth 2._______________ toprotect its own industry.Brussels specialises in "spurious" anti-dumping inquiries, taking3.________________ of a clause in the World Trade Organisationrules that allows states to impose fines or extra4._______________ on products for up to five years if there is asuspicion of anti-competitive practice.Between 1995 and 2000 the EU launched 145 such inquiries againstdeveloping states, compared with 89 for the US, and zero forJapan - though the EU has since announced a moratorium5.________________ the very poorest states.A former EU trade expert said the system was open to abuse. "Itcan be manipulated so easily. The victims of these cases aretotally 6.________________ the dark and can't see where blows arecoming from. If they try getting redress from the European Courtthey're not going to get very far, because the Court always7.______________ in favour of the Commission."The report, Rigged Rules and Double Standards, claimed that non-tariff barriers 8._______________ the real average of EU barriersagainst poor countries from 5.1pc to nearer 9pc.It cited a World Bank study 9._________________ that Africanproducers of nuts, cereals and dried fruits will lose about $670m(£465m) a year as a result of the EU's restrictions on Aflatoxin,a naturally occuring carcinogen. While Aflatoxin is harmful inhigh 10.________________ , the EU has set limits that are vastlymore restrictive than international norms.A European Commission spokesman 11.__________________ the reportyesterday as "gimmickry aimed at grabbing headlines" and disputedmany of the key figures.

- 123 -123

He said the EU had championed the cause of poor states in theDoha trade talks last year and was financing a raft of differentschemes to help exporters - such as poultry 12._________________in Egypt and fresh flower producers in Kenya - to meet EU health13._________________. "The EU is the only trade entity in theworld that has committed itself totally to free trade for the 49poorest countries," he said.America comes a close second in the hypocrisy list, practisingall kinds of tricks to shield its producers. Last November, theUS Congress did a favour for the US catfish-industry byarbitrarily deeming Vietnamese catfish to be another species,blocking Vietnamese imports 14._______________ a stroke.The report concludes that the "Great Trade Robbery" practised bythe rich countries costs the poor world about $100 billion ayear, keeping them trapped in 15._______________ economies.

(http://www.telegraph.co.uk)Choose the best word from below to fill in the gaps:

1. a) appearing b) developing c) rising d) thriving2. a) boundaries b) impediments c) blockades

d) barriers3. a) advantage b) favour c) help d) profit4. a) taxes b) excises c) duties d) tariffs5. a) against b) for c) towards d) onto6. a) out b) above c) below d) in7. a) determines b) rules c) pronounces

d) establishes8. a) arise b) rose c) rise

d) raise9. a) closing b) concluding c) figuring

d) presuming10. a) doses b) portions c) quantity

d) measures11. a) conceded b) dismissed c) banished

d) declined12. a) growers b) producers c) raisers d) farmers13. a) patterns b) models c) standards d) rules

- 124 -124

14. a) in b) at c) about d) over15. a) subsistence b) affluence c) upkeep d) providence

2. Read the extract below about interest-based negotiations. Inmost of the lines 1-15 there is one extra word. It is eithergrammatically incorrect or does not fit in with the meaning ofthe text. Some lines, however, are correct. If a line is correct,write CORRECT against the corresponding number; if there is anextra word in the line, write the extra word in CAPITAL LETTERSagainst the corresponding number on your answer sheet. E.g. 0 –AN, 00 CORRECT

000 1 2 3 4 5 6 7 8 9101112

No matter where you're doing business, it's important to reach an common understanding with other people, whether it's across the street or around the world. But reaching common ground can sometimes be difficult if you're dealing with a different national or corporate culture. How can you get down to the heartof a negotiation despite these issues? That's where interest-based negotiations come into, says SteveCohen, president of The Negotiation Skills Company(TNSC), aBoston-based international consulting firm specializeing innegotiations training. What interest-based negotiations do, in a nutshell, is determinewhat both parties' interests are and any other special intereststhey might represent. In others words, it isn't what they want,but why they want it that's more important, says Cohen. By concentrating on the overall interests from both parties,issues of personal and cultural negotiation style can often beoverlooked. Cohen says this is a point he stresses when teachingoverseas: If you do a good job of negotiating, people from othercultures will respect them. No matter the nationality of his students, they come intonegotiations training for one important reason, he says."How doI get to the common interests and use them to build up anagreement that is fair, durable and to which there is meaningfulcommitment on the part of all the parties." This is because once all of the cultural aspects of anegotiation have been stripped away, the principle issue isinterest. But how do you determine one mutual interest in across-cultural negotiation? A important element is to ask questions and listen closely, not

- 125 -125

1314

15

so much to what issues they may propose or discuss, but as to the reasons why they are doing so. Once the reason behind the other party's stance is identified, it becomes much easier to try to reach common interests, he says.

(http://www.negotiationskills.com/)

3. Read the following text about the bill of lading. Foreach gap 1-15 write one word against the corresponding number.There is an example at the beginning: 0 – who.

Bill of Lading - the written transportation contract betweenshipper and carrier (or their agents). It identifies the freight,0……………………. is to receive it and the place of delivery and givesthe terms of the agreement. All goods going to a 1…………………… at onedestination in a single shipment or on one truck must be on asingle bill of lading.The Order Bill of Lading is negotiable. Its 2…………………… is toenable a shipper to collect for the shipment before it reachesits destination. The shipper sends an original bill of lading anda draft for the charges 3………………… a bank. The receiver pays the carrier's agent the amount of the draft andthen 4…………………… receive the goods. With this method, the shippercustomarily consigns the shipment 5………………….. himself. The personor company to be notified at destination is 6…………….……... Theshipment may be released to the receiver only upon the order ofthe shipper. The order bill of lading must be surrendered withdelivery of freight. Always printed on yellow paper. 7…………………...straight or order bills of lading may be designated as "through."A Through Bill of Lading covers shipment be more than onetransportation company at a fixed rate for the entire service.8…………………… than one type of transportation company (such as truckand rail) may be utilized. The Bill of Lading is your contract. Its terms will determineyour rights if anything 9……….….……. wrong. The bill of lading isthe contract 10…………………… you and the moving company. The contractused by most moving companies was drafted by the industry, butmust 11……………….. contain certain basic information about yourmove. The bill of lading must tell you:

- 126 -126

The name and address of the household goods carrier actuallydoing the move

The points of origin and 12…………………… The name, address, and telephone number of the household

goods carrier that should be 13…………………… in relation to thetransportation of the shipment

The agreed date or period of time for pickup of the shipmentand the agreed date or period of time for the delivery ofthe shipment; the maximum amount required to be paid at thetime of delivery to obtain delivery of the shipment when thetransportation is to be performed on a COD basis

Evidence of any insurance coverage sold to or procured forthe shipper, 14………………..… the amount of the premium for suchinsurance.

If anything on the contract is not what you 15…………………….., discussit with the mover before the move because once the goods areshipped the contract is in effect.

(http://www.scinet-corp.com/associates)

4. Read the text below about economic integration as aweapon against poverty and use the words on the right, listed 1-12, to form a word that fits in the same numbered space in thetext. E.g. 0 – POVERTY

Make Economic Integration a Weapon against PovertyRejecting claims that globalization is increasing 0._________________ and 1._________________, the Secretary General of the International Chamber of Commerce, Maria Livanos Cattaui, has called for evencloser economic 2._________________ among nations. Addressing a conference of the Organization for Security and Cooperation (OCSE) in Europe (OSCE) earlier this month, she said the real 3._________________ was that there has been far too little successful integration, not too much. "Above all, economic integration, when it has been 4._________________, has been the prime reason for the 5.________________ of poverty and global inequality - it has not increased it."The ICC Secretary General said one of the positive features of the past two decades had been that a large number of the most 6._________________ developing countries had started to

0. POOR1. EQUAL

2. INTEGRATE

3. TRAGIC

4. SUCCESS5. REDUCE

6. PEOPLE7. PART

- 127 -127

7.________________ successfully in the global industrial economy.While at the beginning of the period, manufactures had accounted for less than a quarter of developing country exports, manufactures now accounted for about 80%."This is quite a 8._________________ increase. Thesesame countries have increased their participation inthe world economy, doubling such participation in terms of the ratio of trade to income."The bad news was that there were still two billion people living in countries that were participating neither in globalization nor in development. "Growthin these countries was in fact negative in the 1990s. Tragically, they are being 9.________________marginalized within the world economy."Ms Cattaui said: "The myths about 10.__________ as such must be dispelled now. All successful developing countries have exploited international opportunities in their development. What is needed now is an 11.__________ on how we start to reverse the 12._______________ of the rest."

(http://www.iccwbo.org/home/news_archives)

8. DRAMA

9. PROGRESS10. GLOBE

11. AGREE12. MARGIN

5. Collocations

A. Match the adjectives and nouns in the left-hand column with the nouns in right-hand column to form suitable collocations:

13.economic14.protectionist15.transatlantic16.trading17.retaliatory18.climate19.global20.international21.export22.immediate23.appeal24.trade

m) partnersn) sanctionso) leadershipp) liberalisationq) systemr) proceduress) relationst) issuesu) changev) measurew) orderx) subsidy

- 128 -128

B. Read the following text about the World Trade System andfill in the gaps with the collocations you found above. You maywant to change the form of these:

Defend the World Trade System

It is a sad commentary on 1.______________________ that thisweek's news of a World Trade Organisation ruling against US steeltariffs should provoke fears of fresh trade tensions. For thepreliminary decision, by a WTO dispute settlement panel, showsthat an important part of the world's rule-based2.______________________ is continuing to function even whenother parts of the 3.______________________ are under pressure. In an ideal world, the US would now acknowledge that the tariffson imported steel products it imposed 12 months ago, which mainlyhit steel makers in the European Union, Japan and Korea, wereboth unjust and protectionist and would lift them. However, theworld is not ideal and the US will do nothing of the sort.Instead Washington has made clear it will appeal against theruling once it is published in a month's time, delaying anydecision at least until the autumn. Given the vitriolic reactionin Congress to the WTO decision, the administration had no otheroption. The mood in Congress is ugly. The WTO panel ruling on steelfollowed a series of cases which the US has lost and where theonus is on Congress to change US law to become compliant. In oneparticularly high-profile case - the foreign sales corporationtax - the US is threatened with EU sanctions worth up to $4bn(£2.55bn) over its continued refusal to change a law that the WTOfound to be an illegal 4.______________________. There has been talk in Congress of the WTO attacking the USmanufacturing base. The real fear is that the WTO is underminingUS law - prompting calls for the US to quit the body. Withrelations between the US and many leading5.______________________ strained because of the war in Iraq, itis easy to imagine such rhetoric fostering more US unilateralism.And US unilateralism really worries business in Europe andelsewhere. When EU business representatives met Alan Larson, theUS under-secretary of state for economic, business and

- 129 -129

agricultural affairs, in Brussels yesterday they questioned himclosely on the Bush administration's commitment tomultilateralism. The concerns were not limited to6.______________________, such as the apparent favouritism shownto US companies when bidding for contracts to rebuild Iraq. Theyalso focused on past US decisions to shun the Kyoto protocol on7.______________________ and the International Criminal Court. In the circumstances, the US determination to appeal against thesteel decision is a blessing in disguise. True, it will donothing to ease the material losses or sense of injustice felt bycompanies abroad - and consumers in the US - at a 8.____________that is blatantly ___________, albeit limited to three years'duration. But it will allow time for Pascal Lamy, the EU tradecommissioner, and Robert Zoellick, the US trade representative,to continue their joint efforts to manage a dispute that, when itstarted a year ago, caused a huge amount of bitterness outsidethe US. Much has already been achieved by the two men. The administrationdefused a lot of grief by granting a series of exemptions thatnow cover more than 1,000 products. These, in turn, persuaded theEU to hold back from its initial threat to impose9.______________________ on the US in anticipation of a rulingagainst Washington from the WTO. Such statesmanship is needed more than ever. The EuropeanCommission's refusal so far to comment on the preliminary rulingdoubtless reflects efforts to pour oil on troubled waters. Butwinning time is only part of the answer. The next few months mustnot be used just as a cooling off period for passions over steelto subside and for the war against Iraq to end. Both sides must recognise how much they benefit from an openmultilateral trading system governed by internationally acceptedrules. The EU and US have the largest trade and investmentrelationship in the world. They depend on each other for theirown prosperity. Both sides must remember this simple fact amid the noise ofbattle. They must use all opportunities, including the Doha roundof 10._____________________ talks and what will inevitably be apolitically charged Group of Eight summit in France in June, toprotect and promote the multilateral trading system. The Bushadministration must take the fight to Congress and lobby fortrade and the WTO there. That would be a true sign of11._______________________.

- 130 -130

And finally, if the dispute settlement panel's verdict stillstands when appeal procedures are exhausted, the US should acceptit was wrong and remove the measures if they still apply. Obeying12.____________________ rules is in the interest of the US, aswell as the wider world.


6. Word-formation. Fill in the gaps with the correct form of the words consign, trade and commerce:

consign1. The goods ____________________ to you by air.

2. The ____________________ hereby authorises any deviation from the usual route or manner of cartage and/or storage of articles which may in the absolute discretion of the Carrierbe deemed reasonable or necessary in the circumstances.

3. The most recent ____________________ of cloth was faulty.

4. The Contractor shall advise the ____________________ immediately after the articles have been despatched, but advance notice must be given if special arrangements are required for off-loading.

trade1. For centuries, Native Americans ____________________ with European settlers.

2. The two countries have become close ____________________ partners.

3. His father is a market ____________________, selling fruit and vegetables.

4. The country's ____________________ in manufactured goods has expandedin the last ten years.

commerce1. The ____________________ future of the company looks very promising.

2. It's a pity Christmas has become so ____________________.

- 131 -131

3. The drug won't be ____________________ available until it has been thoroughly tested.

4. The ____________________ of football has turned it from a sport intoa business.

5. The company sued under the anti-trust laws, alleging that the union's activity interfered with the movement of interstate ____________________.

7. TRADE. Collocations. Match the following nouns and adjectives with trade in order to form suitable collocations: agreement, balance, barriers, cross-border, deficit, export, foreign, illegal, surplus, world.

______________ trade________________________________________________________

trade _____________ _____________ _____________ _____________ _____________

Now fill in the gaps in the sentences with the collocations you found above.

1. The two countries have signed a _____________________ for one year only.

2. A second rail network between Hongkong and Shenzhen would be needed considering the drasticincrease _____________________ and passenger flow.

3. The chemical industry has a large and growing _____________________.

4. Engaged as it is in a battle for _____________________ as a condition of national survival, thiscountry can have little patience with labor's family feuds.

5. The UK _____________________ widened last month.

6. Mr Waldegrave, who robustly defended the _____________________ at a farming conference inOxford, had earlier invited the activists to meet him to discuss ways of securing better treatment for animalsafter they reached the Continent.

7. Foreign reserves have been rebuilt and the _____________________ has recovered.

8. Interpol calculates the _____________________ in art and antiques is third only to drugs and white-collar crime, with worldwide illicit sales of between $3 billion and $10 billion each year.

- 132 -132

9. Washington published the preliminary retaliation list after talks in Beijing this week during which China failed to accept US conditions to lift _____________________.

10. The key to transforming government functions was streamlining and reforming the systems of planning,finance, labour, commerce and _____________________.

8. Match the following words and expression referring to entrepreneurs with their corresponding definitions:

1. air waybill

2. force majeure

3. insurance certificate

4. letter of instruction

5. freight claim

6. certificate oforigin

7. dutiable list

8. entry papers

a) a certificate used to guarantee the consignee that insurance is furnished to cover loss or damage to the cargo while in shipment.

b) a demand upon a carrier for the paymentof overcharge or loss or damagesustained by shipper or consignee.

c) a listing of items in a country's tariff schedule for which it charges import duty.

d) a shipping document used for the transportation of air freight. It includes conditions, liability, shipping instructions, description of commodity, and any applicable transportation charges.

e) any document pertaining to theimportation of goods that must be filedwith the Customs officials.

f) a condition of superior or irresistibleforce such as Acts of God, includingearthquakes and floods, which cannot beavoided by the exercise of due care andis included in contracts to excuseparties from performance when suchevents occur.

g) a document attesting to the country of origin of the goods. It is often required by the customs authorities of a country as part of the entry process.

h) a form used by a shipper to authorize acarrier to issue a bill a lading or an

- 133 -133

air waybill in the shipper's behalf.

9. Synonyms. Read the following text about customs and VAT fraud and find words in the text which mean the following:

13. deal with (in a more severe way)

14. corroborate

15. overcharge16. conspicuou

s17. honest18. chargeable

19. harmony20. shady21. approximate22. secure23. callous24. changeable

Customs to Widen VAT Fraud Net

A proposal to make companies pick up the bill for rogues in trading chains has angered accountants, says Michael BecketIf any company in a trading chain fails to pay its VAT, all theothers have to pay it. That is one of the unnoticed clauses inthe Finance Bill which is provoking anger and alarm to thespecialist accountants investigating the implications.The legal measure is concentrating at the moment on computers,mobile phones and their components. If the tax has not beenreceived from any dealer, all the other traders in the chain forthose goods become "jointly and severally liable".That means a shady operator who collects the VAT and thenvanishes could land a company three stages down the line with amassive extra bill. This is to counter "carousel fraud" - Customs& Excise calls it missing trader fraud.The tax authorities reckon these schemes lost the exchequer £2.75billion of tax revenue in the 2001-02 tax year and the amount isgrowing rapidly. Crime syndicates and terrorists are gettinginvolved in the trade, says Customs.Michael Conlon QC, a leading VAT barrister, said "the figures don't stand up to close audit but there are certainly rogues in this field".Gordon Brown said in the Budget speech he was planning to crackdown on tax fraud, but "this is just wrong", said John Whiting of

- 134 -134

accountancy firm PwC. It means that in the government's pursuitof the guilty, it would be damaging the innocent."This is totally draconian. It means totally innocent andunconnected parties, who know nothing about what has been goingon down the line, would be hit. It is not just inequitable it isabsolutely disastrous", said Chas Roy-Chowdhury of theAssociation of Chartered Certified Accountants.Paddy Behan of accountancy firm Grant Thornton said "it is anextremely far-reaching provision".Mr Conlon agreed the legislation gives Customs very wide powersand "there is no reason to suppose they will use it in agentlemanly way - they will probably use it in a draconian way".As one accountant drily put it, "sometimes Customs inspectorshave an emphatic manner". "One recognises there is a problem"added Mr Conlon, "but I wonder if Customs has pushed the remedybeyond the bounds of proportionality and human rights".Mr Whiting pointed out "they can go after anyone in the chain".If the target happened to be a small business it could be sunk byhaving to pay somebody else's tax liability arising from a majordeal.According to the draft legislation, Customs has to serve a noticeon the trader that it "knew or had reasonable grounds to suspect"the VAT would go unpaid by one of the enterprises in the chain.To fend off the claim the company would have to show it had takenall reasonable precautions to ensure customers and suppliers werestraight. But that can land companies with a huge extraadministrative burden, and Customs estimates that 10pc of VAT-registered traders may be affected.It estimates that for a quarter of the affected businesses itwill mean only an extra 1.25 hour of extra work a year, and foranother 12pc it may mean six hours.Businesses disagree. "In addition to having been made unpaid taxcollectors for the government, businesses are now being forced totake on the heavy burden of unpaid tax enforcer", said MrWhiting.Mr Roy-Chowdhury pointed out it is just not possible to takeprecautions against anyone down the line - managers could notcheck on companies they could not guess would be involved at alater stage of the dealings.Mr Behan said his firm was warning companies the law was drawn sowidely it was an extremely serious matter and they should installrobust procedures to protect themselves.

- 135 -135

But Mr Conlon pointed to some "quite insidious" provisions in theBill about the obligations of traders. If the price of the goodswas less than the market average or below what previous suppliershad charged, a company should suppose something fishy, thelegislation suggests.Yet both mobile phones and computers are in highly volatilemarkets, and their components even more so. That means pricesfluctuate widely from day to day with no suggestion fraud.Mr Behan added that "we are very concerned how widely drawn thelegislation is". It does not specifically mention fraud whichmeans "it could be applied in other circumstances such as where abusiness had reasonable grounds to suspect a customer would goinsolvent", and hence be unable to pay its VAT bill.Even before the law has been pushed through some of itsprovisions appear to have been implemented. In the BondhouseSystems case earlier this year, the company was found liable topay someone else's unpaid VAT because although it was admittedlyinnocent, it was caught up in one of these carousel frauds.Tax lawyers and accountants have ranged from calling that a"surprising" decision, to damning it as plain wrong.But then as Mr Behan said "lots of things happen in the VAT worldthat would seem grotesque in the real world".

(http://www.telegraph.co.uk)

10. Antonyms. Read the following text about free trade andfind words in the text which mean the opposite of the following:

13. capability14. hostility15. blessing16. vigour17. breakthrou

gh18. aggravatin

g

19. forbear20. congeniality21. strengthenin

g22. imposed23. advanced24. grave

United by Free Trade

Faith in global integration as inevitable and beneficial is eroding. The sentiment was never unanimous of course, but the fight over Iraq has estranged the United States from many of its

- 136 -136

traditional European partners. Fear of terrorism has led to increased doubts about opening borders to free movement of peopleand goods. Bedrock institutions of multilateralism -- the United Nations, NATO, the European Union -- are in various states of disrepair. All the more reason, you would think, for the United States,Europe and Japan to press forward with the trade liberalizationthat has been proven to increase prosperity -- and upon which thedeveloping world so desperately depends. But in that field, too,progress is stalled and doubts are growing. Bilateral tradenegotiations have had some success, but there's a danger thatdisputes over security will creep into the broader, multilateralnegotiations, and that the World Trade Organization will becomeone more multilateral casualty. True, the origins of the WTO stalemate have little to do with thebroader political fracas. A reduction in agricultural subsidiesand price supports, perhaps the most important goal of thecurrent trade negotiating round, has long been stopped in itstracks by Europe's inability to reform its own agriculturalsubsidy regime. As a result, it now looks as if crucialnegotiating deadlines, set for the end of this month, will not bemet. Without a doubt, the primary victims of Europe'sintransigence are the world's poorest countries, whose economieswould benefit far more from freer markets for their commoditiesthan they would from new injections of aid money. Indeed, untiltrade barriers are lifted, any conversation about "helping thedeveloping world" will always have a farcical ring. Meanwhile, the U.S. position on loosening patent rules on drugsfor very poor developing countries is also in need ofreexamination. It is unacceptable that millions of victims ofAIDS, tuberculosis and other epidemics cannot afford the drugsthat could cure them because the American drug industry keeps theprices too high. Talks on this issue collapsed last December, andalthough U.S. negotiators have agreed not to pursue poorcountries that manufacture generic versions of critical drugs,the onus is still on the United States to make sure the drugs aregenuinely and easily available where they need to be. There are other, smaller ways to show more goodwill on tradeissues too. Congress could, for example, finally pass rulesremoving tax exemptions for American exporters, thereby puttingthe United States in line with WTO rules. But freer trade inagriculture and wider access to generic drugs are of the greatest

- 137 -137

importance, to the economies of the developing world and to theinternational perception of the United States. Failure to makeprogress in these two areas will send the wrong message aboutthis administration's priorities to the millions of people whocan still only dream of taking part in the global economy thatAmerica helped create, and that American rhetoric continues topromote.


- 138 -138

Answer Key

UNIT ONE MARKETING

I. READING

2. Steps in the Selling Process

8. Prospecting and qualifying.9. Preapproach10. Approach11. Presentation and demonstration12. Handling objections13. Closing14. Follow-up

4. Your 7 Step, One-Day Marketing Plan

1. F

2. F.

3. T.

4. T5. F6. T


1. Marketing Research

1. f)

2. k)

3. o)

4. c)

9. e)10. n)11. b)12. i)13. l)14. d)15. j)

- 139 -139

5. g)

6. a)

7. h)

8. m)

2. Price Elasticity

1. a)

2. c)

3. d)

4. b)

5. c)

6. c)

7. a)

8. b)

9. a)10. d)11. a)12. c)13. b)14. a)15. d)

3. Selling Techniques

1. correct2. THE products3. passed4. correct5. visiting6. neither7. off

8. on9. is it10. one11. brunch12. correct13. has14. correct

4. MARKET

A. Word Formation

9. The first step in developing a marketing strategy is to understand your customers, enabling reaction to their changing needs and the changing dynamics of the market.

- 140 -140

10. A good way to think of the favourable position in the mind of the consumer that marketers are trying to influence is to consider what can be termed the 'perceptual or mental ladder.

11. We market goods and services for a special Sunday dinner.

12. These decisions in market-oriented organisations are made in the first place at the business level of strategy.

13. However, corporate objectives may simply represent the wishes of top management rather than reflecting marketplace reality.

14. Market segmentation can be thought of as a process where the market is broken up into smaller more defined sub-markets .

15. The second point highlights that segmentation is a necessary pre-requisite for target marketing.

C. Fill-in-the-gaps

11. However, if the marketing concept is accepted as a guiding philosophy these conflicts canoften be resolved.

12. In developing their functional strategy, marketers undertake the marketing managementprocess.

13. Adopt an aggressive marketing posture, namely selling, advertising, pricing, etc.

14. Societal marketing takes into account society's well-being.

15. Essentially, this process is undertaken in a formal sense when the marketing managerdevelops the marketing plan.

16. The producers will try non-price tactics and might even introduce some confusionmarketing to make us unsure of what the exact purchase price is.

17. Marketing research usually involves formal studies that are undertaken to solve aparticular problem.

18. Companies need to develop ethics of corporate marketing to ensure all their employees act in a manner which is considered moral.

19. Before a firm implements its marketing strategy it should determine targets (segments) and then select and act on those which offer the greatest opportunity for long term profitpotential.

20. The second point highlights that segmentation is a necessary pre-requisite for target marketing

5. Collocations. Part One.

- 141 -141

A.1. e)

2. i)

3. d)

4. f)

5. j)

6. g)

7. b)

8. c)

9. a)

10.h)

B.7. strategic

planning

8. business stength

9. active buyer

10. basic research

11. buying intent

12. quality control

13. disposable income

14. direct marketing

15. distribution channel

16. consumer behaviour

6. Collocations. Part Two.

A.1. e)

2. g)

3. h)

4. b)

5. a)

6. f)7. c)8. I)9. d)10. j)

B.1. consumer

expenditure6. self service7. shopping good

- 142 -142

2. focus group

3. convenience product

4. market demand5. marketing mix

8. store layout9. target market10. market area

7. PRICE

A. Price +verbcollapsed, declined, dropped, drifted down, escalated, fell, fluctuated, jumped,kept/remained steady, outstripped, plummeted, plunged, ranged from…to, recovered,rose, shot up, varied, went through the floor/roof

B. Verb+particle

9. b)

10. d)

11. h)

12. c)

13. f)

14. e)

15. g)

16. a)

8. BRAND

1. c

2. f

3. a

4. e

5. d

6. b

7. i

8. h

9. g

9. Synonyms. Corporate Objectives

1. broadly

2. requirements

7. poor

8. dissatisfied

- 143 -143

3. underpinning

4. performs

5. limiting

6. exposing

9. diminution

10. innovativeness

11. welfare

12. achievable

UNIT TWOADVERTISING

II. I. READING COMPREHENSION

2. Advertising and the Mind of Consumers

1. D2. E3. G

4. A5. F6. B

4. Attention and Distraction

1. F2. T3. T

4. F5. F6. T

6. Advertising Tips

1. Frequency is the key2. Expand your reach3. Cut through the clutter4. Call for action5. Make the response easy6. Track your results7. Plan early and often

8. Beware of Promises of Riches from Abroad

1. b 4. d

- 144 -144

2. b3. c

5. b


1. Vocabulary Definitions

1. i

2. j

3. k

4. l

5. m

6. n

7. o

8. h

9. g

10. c

11. d

12. b

13. e

14. f

15. p

16. a

2. Fill in the gaps 1. He disliked Christmas for its extreme consumerism.2. In advertising, puffery means exaggerated commendation, or hype. The term comes from the Old English word pyffan, meaning “to blow in short gusts” or “to inflate; make proud or conceited

3. TV viewers appeared immune to conventional commercials; and a plethora of new media options based on new technologies promised to reinvent the very process of advertising.

4. This commercial would not be this good if the jingle going with it were not so catchy!

5. The publicity generated by the court case has given a welcome boost to our sales. 6. Sellers should not be allowed to use the _bait-and-switch tactics because it tempts buyers buy an undesired product at a higher price. 7. Who is the reputable sloganeer who created this ad?

8. For most of us, "hard sell" conjures up a less than pretty picture. You might even go so far as tosay it smacks of intimidation, of someone trying to sell something we wouldn't buy unless we were talked into buying it.

- 145 -145

9. The training brochure deliberately adopts a soft sell approach by tying to gently persuade the customers to buy the new brand.

10. Clients trimmed their ad budgets, and many turned to more cost-effective sales promotion alternatives, such as coupons, direct mail, and direct marketing.

11. Skywriting is done at an altitude of about 10,000 feet where it can be seen for about twentymiles in all directions. The letters are very large and stay in the sky for ten to twenty minutes ormore, depending on the sky conditions. For best results, the sky should be clear and the messageshould be short. On longer messages the first letters tend to dissipate before the whole messagecan be written.

12. That interview was just a way for him to plug his new book.

13. We push our product with good marketing

14. They paid $2 million to the world champion for the endorsement of the new aftershave.

15. Most advertising is paid for by sponsors.

3. Media Planning

1. geographically

2. planner

3. expectations

4. defensive

5. offensive

6. sale

1. 7. allocation

8. creative

9. advertising

10. continuity

11. combination

12.seasonality

4. Cloze. Source Dimensions

6. responsible7. circuitous/

complicated/indirect

8. produce9. agency10. c

1. 11. viewer

12. lends/adds/confers/ provides

13. discourse/speech

- 146 -146

ommissioned/authorised

14. virtual/simulated

5. The Global Interactive Age

1.d

2.o

3.n

4.m

5.l

6.i

7.b

8. c

2. 9.f

10. k

11. j

12. e

13. a

14. h

15. g

6. Types of Advertising1. f

2. p

3. j

4. a

5. i

6. b

7. c

8. e

9. d

10. o

11. g

12. h

13. m

14. k

15. l

16. n7. Fill in the gaps

1. consumer advertising

2. business advertising

8. product advertising

9. nonproduct advertising

- 147 -147

3. global advertising

4. international advertising

5. national advertising

6. regional advertising

7. local advertising

10. noncommercial advertising

11. awareness advertising

12. action advertising

8. AdvertiseA. Word-formation1. If you want to expand your effectiveness you should advertise in several complementary mediums.2. I found that people had gotten hold of some bright coloured cards that had been designed for advertising purposes.3. It now fell to the lot of young advertisers to arouse the interest of the public.4. His experience in advertisement writing was now to stand him in excellent stead.5. Have you read the job ads/adverts (UK informal) in today’s paper?6. An advertorial is an advertisement in a newspaper or magazine designed to look like an article by the writers of the magazine.B. Collocations

point-of-sale advertisingtransportationword-of-mouthproducttelevisionconsumercorporatedirect mail

advertising column manager department effectiveness spending readership staff audience

C. Verb+advertisementV: run, draft, display, devise, place, tailor, write, expose sb to9. The Art & Science of the Advertising Slogan

- 148 -148

A. Synomyms

a) merit

b) phrased

c) memorable

d) bland

e) resonates with

f) slick

g) perched

h) tinge

i) catchphrase

j) provocative

k) imparts

l) prompt

B. Antonyms

a) perfectly

b) original

c) like

d) continuous

e) believable

f) generic

g) order

h) waffle

i) loss

j) readily

k) relevant

l) negative

UNIT THREEFINANCE


2. Finance’s Strategic Role

1.b2.c3.b

4. c5. a

- 149 -149

4. 10 Financial Resolutions for the New Year

1.g2.a3.j4.c5.d

6.i7.b8.e9.h10. f


1. Financial Planning Is Important For Business Owners

1.n2.o3.d4.b5.m6.a7.h8.c

9.l10. g11. i12. e13. k14. j15. f

2. Factoring is an Effective FinancingOption

1.a2.c3.a4.d5.b6.c7.c8.a

9. c10. b11. d12. d13. c14. b15. a

3. Financial Forums

- 150 -150

1. as2. capitalism3. the4. giving5. correct6. correct7. sail8. correct

9. offering10. filling11. correct12. which13. correct14. it’s15. sollicitatio

n

4. Pizza Meter

2. locations3. devices4. oversees5. developers6. promotion7. unemployed

8. analysts9. return10. discounts11. procurement12. accounting13. efficient

5. Word Formationfinance 1. To bridge the gap between potential developers and available financing sources, EC has hired a project finance specialist

2. Potential sustainable energy projects often fail to become financeable deals due to lack of information and a variety of market and financing barriers.

3. On the investment side, financiers seeking well-developed transactions often find that sustainable energy projects fall outside standard market and transaction structures and present unfamiliar credit-risk issues.

4. Our team is uniquely positioned to work with institutions on both sides of the finance gap in order to identify ambitious projects.

5. Whatever source of funding you pursue to finance your business venture, your chances of success will be greatly increased if you present your case armed with properly prepared, credible financial forecasts.

6. The finances of our company are in a bad state.

invest 1. Professional fund managers invest in stocks and shares and use their expertise to attempt to give better returns than the stockmarket.

- 151 -151

2. One Company manages the investments on behalf of the individual investing.

3. Investors should always consult with an Independent Financial Adviser before investing.

4. Before investing in any of these products, an individual should discuss with their financial

consultant the investment techniques employed

5. Morningstar's indexes were designed to be fully investable.

risk1. We risked losing a lot of money in this venture.

2. Anything that promises to pay too much can't help being risky.

3. The more you know about investment risks, the less you'll fear them.

4. “Measures of the riskiness of banking organizations” is the title of this interesting article.

5. The German Finance Minster has asked parliament to back what he admitted was a highly risky 2004 draft budget.

6. A riskless rate is the rate of return earned on an investment that carries no risk.

6. Shares. Collocations

1. share register

2. redeemable shares

3. paired shares

4. preference shares

5. share capital

6. share cerftificate7. ordinary shares8. share option9. authorised shares

10. share splittings

hare capital

7. Types of risk1. a2. e3. i

6. g7. f8. d

- 152 -152

4. h5. b

9. c

8. CollocationsA.

1. c2. k3. b4. e5. l6. g

7. a8. i9. j10. f11. h12. d

j

I. Merger Endgames (I)

1. fractured market2. market suppliers3. industrialisedcountries4. sole operators 5. fixed costs 6. growth portfolio

7. service providers8. existing business9. potential winners10. growingdifficulties11. full potential12. strategic misteps

9. Synonyms Merger Endgames (II)

1.reversal2.realize3.hostile4.on the threshold5.account for6.scramble

2. outsource3. shift4. combination5. forecasts6. surviving7. shakeout

10. AntonymsMerger Endgames (III)

1.solidify2.out of reach3.aggressive4.focused5.lower6.apportioned

8. block9. classic10. accelerate11. uniform12. knowledgeabl

e13. winners

- 153 -153

UNIT FOUR

BANKING


2. NatWest Current Account Options

1. D2. E3. E4. B5. C6. D7. F8. A9. C

10. F11. G12. C13. G14. F15. B16. C17. G18. C

4. 5 Big German Banks in Loan Pool

1. D.2. F.3. A.

4. H.5. E.6. C.

II. VOCABULARY COMPREHENSION

1. Adding Value to the Banking Relationship

1. d)2. k)3. f)4. n)5. i)

9. j)10. c)11. h)12. m)13. e)

- 154 -154

6. b)7. o)8. a)

14. g)15. l)

2. Banks Plan Identity Theft Crackdown

1. working/collaborating/co-operating

2. spot/detect/discover3. will4. likely5. pieces/types6. where7. type/kind8. recorded/registered/

reported

9. obliges/compels10. expected/

supposed/presumed11. voiced/expressed12. instead13. 'out14. scheme/plan/

programme/project15. including

3. A Generation Unskilled in the Art of Budgeting

1. c)2. a)3. d)4. b)5. c)6. b)7. d)8. a)

9. d)10. b)11. c)12. a)13. d)14. b)15. a)

4. Banks Stalling over Electronic Transfers

1. take2. correct3. suspensed4. its5. an6. correct7. correct8. shaving

9. transaction’s10. correct11. used12. this13. correct14. have15. correct

5. E-commerce

1. consumers 9. electronically

- 155 -155

2. estimated3. transactions4. enable5. currency6. services7. digitally8. encryption

10. negotiated11. payment12. presences13. virtually14. Security15. signature

6. COLLOCATIONS

A. Matching

1. h)2. j)3. l)4. g)5. b)6. k)

7. c)8. d)9. f)10. a)11. e)12. i)

B. Vocabulary definitions

1. bearer securities2. bank vault3. deferred interest4. clearing bank5. credit worthiness6. dishonoured bill

7. promissory note8. crossed cheque9. due date10. portfolio

management11. legal tender12. mortgage loan

7. BANK

A. Word-formation

20.High street banks have been accused of exploiting small firms.

21. She is currently Hollywood's most bankable actress

22.His bankability as a pop star decreased as he got older.

23. She was a successful banker by the time she was forty.

- 156 -156

24. The company was forced into bankruptcy.

25. The intricacies of international banking remained a mystery to him.

26. "Do you think she'll come?" "I wouldn't bank on it".

27. She was commissioned to work on a joint program bankrolled by the U.S. space agency.

28. The recession has led to many small businesses going bankrupt.

B. Types of banks.

1. c)2. f)3. e)

4. d)5. a)6. b)

C. Types of bank accounts

1. e)2. f)3. b)

4. c)5. a)6. e)

D. Collocations

1. bank holiday2. bank statement3. bank rate

4. bank draft5. bank guarantee6. bank overdraft

8. Antonyms.

1. clearing2. spending3. consolidating4. buid up5. outstanding6. individual7. land8. concentrate on

9. properly10. good value for

money11. set up12. owe13. is there14. paid off15. a fair bit

UNIT FIVE

- 157 -157

INSURANCEI. READING COMPREHENSION2. Love on the rocks

19. F20. D21. B

22. C23. E24. A

4. Life Insurance--How Much is Enough? 1. T.2. F.3. F.

4. T.5. F.6. T.

II. VOCABULARY PRACTICE1. Your Home is Your Castle

16. b17. c18. e19. i20. a

21. j 22. f23. h24. d25. g

2. Your boss doesn’t have to provide health insurance 16. state17. workers/

employees18. for19. common20. though21. quit/leave

22. up23. similarly/

likewise24. former25. covered/insured26. lose27. provide

3. Why Auto Insurance Makes Sense 16. a17. c18. b19. c20. d21. b

22. c23. d24. a25. a26. c27. a28. d

4. Whole Life insurance

16. live17. ekspenses18. correct19. adition20. correct

24. correct25. THE insured26. ONE initial

evidence27. correct

- 158 -158

21. then22. other23. correct

28. correct29. THE final30. at ALL time

5. Life Insurance Basics16. financially17. accumulation18. insurance19. choices20. attainable21. living22. dependents23. payment

24. annually25. adoption26. simply27. coverage28. savings29. regardless30. renewable

6. COLLOCATIONS

A. Matching

13. b14. c15. f16. g17. k18. l

19. i20. j21. d22. e23. a24. h

B. Vocabulary definitions13. bodily injury14. blanket

insurance15. advance

premium16. abandonment

clause17. risk

management18. authorised

insurer

19. loss control20. seasonal risk21. insurance

policy22. professional

liability23. binding

authority24. construction

bond

C. Verbs + nouns7. incur losses8. sue sb for damages9. renew

policy/contract10. cover by

12. give cover13. include clause14. be paid on

commission15. satisfy a claim

- 159 -159

insurance11. break a

contract/policy

16. carry out an evaluation

7. INSUREA. Word-formation

29. She insured herself against car theft.

30. This insurance won’t cover burglary.

31. An insurer is the person or company that contracts to indemnify losses for a premium.

32.Without an insurable interest, an insurance company will not issue a policy.

33. The acceptability of an insurance applicant is known as insurability.

34. The person, group, or property for which an insurance policy is issued is called an insured.

35. Reinsurance means the sharing of all or part of a large insurance risk by asking other insurance companies to cover part of it in return for part of the premium.

36. Lloyd’s of London acts as a reinsurer for other insurance companies.

37. A risk of this size has to be reinsured.

38. Making no financial preparation for meeting losses is called noninsurance.

B. Types of insurance7. f8. j9. d10. c11. g

12. a13. e14. i15. h16. b

C. Types of premium7. e8. h9. g10. f

11. a12. d13. c14. b

8. Synonyms

1. acute2. tucked away3. purchased4. chores

7. designed8. in the event9. encompass10. spouse

- 160 -160

5. equals6. assets

11. realistic12. finance

UNIT SIXINTERNATIONAL TRADE


2. International Commercial Terms (INCOTERMS)

1. F.2. T.3. F.

4. T.5. T.6. F.

4. International Factoring

1. c)2. e)3. a)

4. f)5. b)6. d)


1. EU is 'Most Protectionist Trade Bloc in the World'

1. b)2. d)3. a)4. c)5. a)6. d)7. b)8. d)

9. b)10. a)11. b)12. d)13. c)14. b)15. a)

- 161 -161

2. Interest-based Negotiations

1. correct2. down3. into4. specializeing5. correct6. others7. from8. correct

9. them10. correct11. up12. correct13. correct14. one15. a

3. Bill of Lading

1. receiver /recipient

2. purpose / target /function

3. through4. can / may5. to6. specified /

indicated / mentioned

7. Either

8. More 9. goes10. between11. still /

although / though12. destination13. contacted14. including 15. expected /

anticipated / supposed / wanted

4. Make Economic Integration a Weapon against Poverty

1. inequality2. integration3. tragedy4. successful5. reduction6. populous

7. participate8. dramatic9. progressively10. globalization11. agreement12. marginalizati

on

5. Collocations

A. Adjectives + nouns

1. e)2. j)3. g)

7. c)8. k)9. l)

- 162 -162

4. a)5. b)6. i)

10. h)11. f)12. d)

B. Defend the World Trade System

1. transatlanticrelations

2. economic system3. international

order4. export subsidy5. trading partners6. immediate issues

7. climate change8. measure…

protectionist9. retaliatory

sanctions10. trade

liberalisation11. global

leadership12. appeal

procedures

6. Word-formation

consign1. The goods have been consigned to you by air.

2. The Consignor hereby authorises any deviation from the usual route or manner of cartage and/or storage of articles which may in the absolute discretion of the Carrier be deemed reasonable or necessary in the circumstances.

3. The most recent consignment of cloth was faulty.

4. The Contractor shall advise the consignee immediately after the articles have been despatched, but advance notice must be given if special arrangements are required for off-loading.

trade1. For centuries, Native Americans traded with European settlers.

2. The two countries have become close trading partners.

3. His father is a market trader, selling fruit and vegetables.

- 163 -163

4. The country's trade in manufactured goods has expanded in the last ten years.

commerce1. The commercial future of the company looks very promising.

2. It's a pity Christmas has become so commercialized.

3. The drug won't be commercially available until it has been thoroughlytested.

4. The commercialization of football has turned it from a sport into a business.

5. The company sued under the anti-trust laws, alleging that the union's activity interfered with the movement of interstate commerce.

7. TRADE.

1. The two countries have signed a trade agreement for one year only.

2. A second rail network between Hongkong and Shenzhen would be needed considering the drastic increase in cross-border trade and passenger flow.

3. The chemical industry has a large and growing trade surplus.

4. Engaged as it is in a battle for world trade as a condition of national survival, this country can have little patience with labor's family feuds.

5. The UK trade deficit widened last month.

6. Mr Waldegrave, who robustly defended the export trade at a farming conference in Oxford, had earlier invited the activists to meet him to discuss ways of securing better treatment for animals after they reached the Continent.

7. Foreign reserves have been rebuilt and the trade balance has recovered.

8. Interpol calculates the illegal trade in art and antiques is third only to drugs and white-collar crime, with worldwide illicit sales of between $3 billion and $10 billion each year.

9. Washington published the preliminary retaliation list after talks in Beijing this week during which China failed to accept US conditions to lift trade barriers.

10. The key to transforming government functions was streamlining and reforming the systems of planning,finance, labour, commerce and foreign trade.

- 164 -164

8. Vocabulary Definitions

1. d)2. f)3. a)4. h)

5. b)6. g)7. c)8. e)

9. Synonyms. Customs to Widen VAT Fraud Net

1. crack down on2. stand up to (close

audit)3. land (the company)

with4. unnoticed5. straight6. liable

7. proportionality8. fishy9. reckon10. robust11. draconian12. volatile

10. Antonyms. United by Free Trade

1. inability2. goodwill3. casualty4. disrepair5. stalemate6. loosening

7. make progress8. intransigence9. eroding10. lifted11. stalled12. farcical

- 165 -165

BibliographyDicţionare, manuale şi cărţi de specialitate:

1. Adam, J.H. 1989. Dictionary of Business English. Harlow: Longman.2. Bantaş, A. şi Năstăsescu, V. 1997. Dicţionar economic englez-român.

Bucureşti: Editura Niculescu3. Bernard, Y şi Colli, J.-C. 1994. Vocabular economic şi financiar cu

indice de termeni în română, engleză, franceză, germană şi spaniolă. Bucureşti: Humanitas.

4. Bovée C. L. and Thill, J. V. 1992. Business Communication Today. New Jork: McGraw-Hill, Inc.

5. Duncan, F. H. şi Caracota-Dimitriu. M. 1998. English-Romanian Dictionary of Accounting, Economic and Financial Terms. Bucureşti: Garamond.

6. Fuller, N. 1997. Principles of Microconomics. Eastham: Tudor BusinessPublishing Ltd.

7. Hill, J. and Lewis, M. 1997. Dictionary of Selected Collocations. Hove: LTP

8. Leviţchi, L. şi Bantaş, A.1992. Dicţionar englez-român. Bucureşti: Editura Teora

9. Mackenzie, I. 1997. English for Business Studies: A Course for Business Studies and Economics Students. Cambridge: Cambridge University Press.

10. Mackenzie, I. 1997. Management and Marketing with mini-dictionary of 1,000 common terms. Hove: Language Teaching Publications.

11. Marcheteau M. et al. 1995. Dictionnaire économique, commercial et financier – Dictionary of Economics, Business and Finance. Villeneuve-d'Ascq: Pocket.

12. Marcheteau, M. et al. 1979. L'Anglais économique et commercial: 20dossiers sur la langue des affaires. Paris: Presses Pocket.

13. Pearsall, J. and Trumble, B. (ed.) 1995. The Oxford English Reference Dictionary. Oxford: Oxforf University Press.

14. Pitulescu, I. et al. 1997 Dicţionar de termeni juridici uzuali Bucureşti: Editura Naţional

- 166 -166

15. Popescu-Furnea, T. şi Toma, M. 2003. Business Collocations: English-Romanian Dictionary – Colocaţii utilizate în engleza de afaceri: Dicţionar englez-român. Cluj-Napoca: Casa Cărţii de Ştiinţă.

16. Seche, L. Seche, M. şi Preda I. 2002. Dicţionar de sinonime. Ediţia a III-a, revăzută şi adăugită. Bucureşti: Editura Vox Libris.

17. Tuck, A. 1996. Oxford Dictionary of Business English for Learners of English. Oxford: Oxford University Press.

Site-uri http::

http:// www.buseco.monash.edu.auhttp://aef.com/channel.asphttp://beginnersinvest.about.com/library/lessons/bl-introduction.htmhttp://dict.leo.orghttp://dictionary.cambridge.orghttp://encarta.msn.comhttp://esl.about.comhttp://europa.eu.int/celex/eurovoc/http://www.guardian.co.uk/guardian/http://glossary.eea.eu.int/EEAGlossaryhttp://Insure.comhttp://powerhomebiz.com/vol11/recordkeeping.htmhttp://us.hsbc.com/personal/insurance/articles/howmuchisenough.asphttp://www.admedia.org/http://www.allbusiness.comhttp://www.alphatrans.comhttp://www.asa.org.uk/index.asphttp://www.bized.ac.ukhttp://www.business-authority.comhttp://www.businessweek.com/http://www.busop1.com/finplan.htmlhttp://www.cambridgeesol.orghttp://www.dwt.com/practc/corp_fin/articleshttp://www.economist.comhttp://www.embainc.com/articles/ad_tips.htmlhttp://www.eminfo.com/articlesection/fiaefoft.htmhttp://www.entreworld.org/Content/EntreByline.cfm?ColumnID=509http://www.finalysis.ie/artiban1.htm#http://www.firstmonday.dk/issues/issue2_10/muscovitch/http://www.forbes.com/columnistshttp://www.globalpolicy.org/http://www.iccwbo.org/home/statements_rules/statements/1999/trade_liberalization.asphttp://www.industryweek.com/CurrentArticles/asp/articleshttp://www.jobcircle.com/career/articles/x/njtc/2989.xml

- 167 -167

http://www.learn.co.ukhttp://www.natwest.com/personal/services/currentaccountshttp://www.negotiationskills.com/http://www.nelson.com.au/reedhttp://www.netmba.com/accounting/fin/process/statements/http://www.nytimes.comhttp://www.redherring.com/insider/2002/0409/2509.htmlhttp://www.scinet-corp.com/associateshttp://www.staffs.ac.uk/schools/business/bsadmin/staff/s5/mscproj/rules.html#start http://www.telegraph.co.ukhttp://www.wikipedia.orghttp://www.wordsmyth.netSuporturi software:Microsoft Encarta World English Dictionary. 2001. (CD-ROM)

- 168 -168

Curs de Limbi Moderne Aplicate in Domeniul Afacerilor

Documents

Transcript of Curs de Limbi Moderne Aplicate in Domeniul Afacerilor