Glossary UNIT 9 MONEY

return on investment (ROI) -the profit on an investment in relation to the amount invested • You could buy municipal bond mutual funds, but the return on investment is unpredictable.

deposit -an amount of money paid into a bank account or held in a bank account, especially when it is earning interest: • Residents have some $4 billion in deposits in local financial institutions.

interest -an amount paid by a borrower to a lender, for example to a bank by someone borrowing money for a loan or by a bank to a DEPOSITOR (= someone keeping money in an account there): • Any spare cash is best put in a savings account where it will earn interest.

loan -money borrowed from a bank, financial institution, person etc on which interest is usually paid to the lender until the loan is repaid: • The couple took out and repaid several loans (= obtained them and paid them

bond -an amount of money borrowed by a government or an organization. The government or organization produces a document promising that it will pay back the money that it has borrowed, usually with interest. The document, which can be bought and sold, is also called a bond: • Many investors switched out of shares into bonds.

default -when someone fails to pay money that they owe at the right time:

gain -an increase in the amount or level of something: • The supermarket chain's share price ended the year with a near 60% gain.

bankrupt -not having enough money to pay your debts: • He was declared bankrupt at London's High Court yesterday.

trade-off -a balance between two situations in order to get an acceptable result:

• The legal restrictions will remain as a trade-off for allowing interstate investment.

venture -a new business activity or project that involves taking risks:

• She identified potential customers for a new business venture she was evaluating

borrower - someone who has borrowed money, especially from a bank or BUILDING SOCIETY: • Borrowers pay 14% interest, due to rise to 15.5% on 1 November

equities -trading in companies' shares on a stockmarket, rather than trading on other types of market: • investors seeking to place funds in equities

commodity plural commodities -a product that can be sold to make a profit, especially one in its basic form before it has been used or changed in an industrial process. Examples of commodities are farm products and metals:

• The company trades worldwide, buying and selling basic commodities such as timber, coal and cement.• Rice is the country's principle export commodity.

trading floor -the part of a financial market where shares, COMMODITIES etc are bought and sold. • He eventually took responsibility for running the dealing floor.

issuer -a company that makes its SECURITIES (= bonds, shares etc) available for sale: • Another stimulus to the market has come from issuers buying bonds.

broker- a person or organization that buys and sells SECURITIES, currencies, property, insurance etc for others:

• The success of Independent Insurance comes from a close relationship with its brokers, who take a commission for acting as go-betweens with clients.

trader- someone who deals in shares, bonds, currencies, COMMODITIES etc on a market either for themselves or for a financial institution:

• To the surprise of many traders, the dollar rose in European markets.

security plural securities -a financial investment such as a bond or share etc, or the related CERTIFICATE showing who owns it:

• Securities firms outside the EU often operate under different rules.

Big Bang - the Big Bang a popular name for the major changes that happened on the London STOCK EXCHANGE in 1986, which ended the differences between JOBBER s and BROKER s and the system of fixed COMMISSION s on buying and selling shares

Jobber

in Britain before the BIG BANG, someone whose job was to buy stocks and shares in a particular area of the market, dealing only with BROKER s or with other jobbers, not directly with investors. Now any person whose job is buying and selling stocks and shares can deal directly with investors or other dealers; = STOCKJOBBER:

• The distinction between brokers and jobbers has disappeared.

stock option -an option to buy shares at a particular price, especially an option given to employees to buy shares in the company they work for; = share option:

• a stock option plan for key employees that gives Mr O'Reilly options to buy four million shares of stock

What Are Economic Activities?

Economic activity involves the use of scarce resources in the provision of goods to satisfy unlimited wants. It is a measure for meeting the problem of making a living; other categories of work are not related to this problem. There may be differences in nature between one source of livelihood and another but the underlying similarity in all spheres of economic activities is that work is performed against ware or remuneration. In the modern social scheme of things, these activities rotate around the financial axis and that is why all the activities involving money earning and money spending are called economic activities.

But in order to satisfy the variegated purposes of human life and existence, the arena of man's work has widened itself to a much larger extent and he is to perform many other general duties and functions which do not come under the definition of economic activities as mentioned, for example, the vast area of human experiences encapsulating the field of art and religion where economics has no as such role to play. Nevertheless, when even such types of functions have got exchange values, those are considered as economic activities. For example, when a man performs the worship of god at his home, it is not a piece of economic activity; but when he does so in the house of his customer against payment, it comes under the purview of economic activity.

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