Stock exchange

Stock exchange — organized market for the sale and purchase of securities such as shares (share — one of the equal parts into which the ownership of a company is divided) and bonds (bond — an official document promising that a government or company will pay back money that it has borrowed, often with interest). In developed capitalist countries, the stock exchange has important functions: as a ready market for securities, it ensures their liquidity (the state of being readily convertible into cash) and thus encourages people to channel savings into business; and, as a pricing mechanism, it determines prices that reflect the actual value of a company's stock (the capital of a company). Trading is done in various ways: it may occur on a continuous auction basis or it may involve brokers buying and selling shares in a company for other people. Membership requirements of the exchanges of different countries vary mainly with respect to the number of members and the rigour of the eligibility requirements. Membership requirements also differ in the degree to which government participates in their management. The London Stock Exchange, for example, functions as an independent institution, free from government legislation. In the United States, stock exchanges are subject to specific legislative regulation. In Europe, it is quite common for the members of the exchanges to be appointed by a government official and to have semigovernmental status.

1) What meant by the term “stock exchange” is? 2) What functions the stock exchange does have? 2) How trading is done? 3) How membership requirements of the exchanges of different countries do vary? 4) What the London Stock Exchange function as does? 5) What stock exchanges in the United States are subject to? 6) Who the members of the exchanges in Europe appoints? 7) What meant by the term “liquidity” is?

II. Agree or disagree with the following statements.

1) Stock exchange is a place where shares are bought and sold. 2) Stock exchange is not a ready market for securities. 3) Stock exchange keeps people from putting savings into business. 4) Stock exchange is a pricing device. 5) Stock exchange determines the exact value of a company's stock. 6) Stock exchange trading might be based on an auction basis. 7) Stock exchange trading must not involve brokers. 8) Stock exchange may act as an independent institution. 9) Stock exchange stands upon government legislation. 10) Stock exchange might have semi-official status.

III. Translate the statements from Russian into English.

1) Фондовая биржа – это организованный и регулярно функционирующий рынок по купле-продаже ценных бумаг. 2) Фондовая биржа мобилизует временно свободные денежные средства через продажу ценных бумаг. 3) Фондовая биржа устанавливает рыночную стоимость ценных бумаг. 4) Фондовая биржа осуществляет перелив капитала между компаниями, отраслями и сферами. 5) Биржа может функционировать как независимый институт. 6) Биржа может иметь полуофициальный статус. 7) Члены биржи назначаются правительственными чиновниками.

IV. Complete the following statements.

1) Stock exchange is … 2) As a ready market for securities, stock exchange ensures … 3) Stock exchange encourages … 4) As a pricing mechanism, stock exchange determines … 5) Stock exchange trading may occur … 6) Stock exchange trading may involve … 7) Membership requirements vary … 8) Membership requirements differ … 9) The London Stock Exchange functions … 10) In the United States, stock exchanges are … 11) In Europe, the members of the exchanges may be appointed by … and may have …