TEST (20 – 12 – 2021)

ANSWER SHEET
I. VOCABULARY (2.0 pts.)
1. D 2. J 3. K 4. I 5. F 6. A 7. G 8. E 9. B 10. C
II. GRAMMAR (2.0 pts.)
1. D 2. C 3. D 4. D 5. B 6. D 7. B 8. A 9. B 10. B
III. READING (2.0 pts.)
1. Companies raise money by issuing new shares, selling them to their existing owners or on the
stock market (equity finance), or borrow money (debt finance), usually by issuing bonds.
2. Because if an insolvent or bankrupt company sells its assets, bondholders are among the
creditors who might get some of their money back.
3. If interest rates go down existing bonds paying a higher interest rate than the market rate
increase in value.
4. Companies generally use an investment bank to find buyers.
IV. ENGLISH-VIETNAMESE TRANSLATION (2.0 pts.)
1. Các công ty hoặc phân phối một phần lợi nhuận của họ cho các cổ đông như một khoản cổ tức
hàng năm.
2. Quỹ phòng hộ là quỹ đầu tư tư nhân dành cho các nhà đầu tư giàu có kinh doanh chứng khoán
phái sinh và cố gắng thu được lợi nhuận cao cho dù thị trường tăng hay giảm.
3. Hóa đơn là một danh sách các hàng hóa đã được bán, công việc đã được thực hiện, v.v., cho
thấy những gì bạn phải thanh toán.
4. Thu nhập là toàn bộ số tiền nhận được từ các hoạt động kinh doanh và đầu tư trong một thời kỳ
nhất định.
V. WRITING (2.0 pts.)
1. Cash flow is the money generated from an investment.
2. Companies generally use an investment bank to issue their bonds.
3. Governments also issue bonds to raise money, and these are considered to be a risk-free
investment.
4. They wished to make an absolute return even if the stock market fell.

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 TEST

I. VOCABULARY: (2.0 pts.)

Match the words in the box to their definitions. There are two extra words that you don’t need.
A. Takeover bid D. Speculator G. Creative accounting J. Dividend
B. Credit rating E. Intangible H. Logistics K. Transaction
C. Creditors F. Insolvent I. Bonds L. Incentives
1. A person who buys and sell goods, property, currency or shares of a company with the hope of
making the highest profit in a short time.
2. A part of the profit of a company that is paid to its shareholders.
3. A piece of business that is done between people, especially an act of buying or selling.
4. Certificates of debt issued by governments or companies to raise money.
5. Unable to pay debts.
6. When one company offers to buy or acquire another one.
7. A way of doing or presenting the accounts of a business that might not show what the true
situation really is.
8. Something that does not exist as a physical thing but is still valuable to a company.
9. Estimates of people’s ability to fulfill their financial commitments.
10. People or Institutions to whom money is owed.
II. GRAMMAR: (2.0 pts.)
Choose the best answer among A, B, C & D to complete the sentences.
1. People use ___________ such as cars, houses, and so on to apply for a mortgage.
A. money B. shares C. bonds D. assets
2. Workers have to spend an amount of money for the government, which is called
____________ .
A. salary B. fee C. tax D. money
3. ____________ means with property or another asset used as a guarantee of payment.
A. Speculative B. Reclusion C. Default D. Collateralized
4. A sum of money borrowed from a bank is_____________ .
A. a credit card B. a debit card C. a hire D. a loan
5. Successful companies can issue stocks and shares to raise capital to ____________ their
operation.
A. narrow B. expand C. widely D. open
6. Selling stocks for the first time is called an IPO or ____________ public offering in the US and a
flotation or an IPO in Britain.
A. last B. second C. final D. initial
7. Should companies record raw materials, work-in-progress, and their____________ of products
ready for sale at their cost price, or their current market.
A. invent B. inventory C. invention D. inventing
8. ____________ shows the difference between the revenues and expenses of a period.
A. Profit and loss statement B. Cash flow statement
C. Balance sheet D. Income statement
9. ____________ is all the money received from business activities during a given period.
A. Assets B. Income C. Transaction D. Wage
10. Companies regularly ____________ their business activities by issuing bonds.
A. pay B. finance C. cash D. fund

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III. READING COMPREHENSION: (2.0 pts.)
Read the text carefully and then briefly answer the questions given below it.
Companies finance most of their activities by way of internally generated cash flows. If they need
to raise more money to expand their operations they can either issue new shares-selling them to
their existing owners or on the stock market (equity finance)-or borrow money (debt finance),
usually by issuing bonds. Companies generally use an investment bank to issue their bonds, and to
find buyers, which are often institutional investors like insurance companies mutual funds and
pension funds.
Bondholders get back their original investment (or ‘principal’) on fixed maturity date, and receive
interest payments (the ‘coupon') at regular intervals (six-monthly or annually) until then. Most
bonds have fixed interest rates.
For investors, bonds are generally safer than stocks or shares, because if an insolvent or bankrupt
company sells its assets, bondholders are among the creditors who might get some of their money
back. On the other hand, in the medium or long term, shares generally pay a higher return than
bonds. For companies, the advantage of debt financing over equity financing is that bond interest
payments from their profits before paying tax, while dividends paid to shareholders come from
already-taxed profits. But debt increases a company's financial risk: bond interest has to be paid,
even in a year without any profits to deduct it from, and the principal has to be repaid when the
debt matures, whereas companies are not obliged to pay dividends or repay share capital.
If tax revenue is insufficient, governments also issue bonds to raise money, and these are
considered to be a risk-free investment. In the US there are Treasury notes (with a maturity of two
to ten years) and Treasury bonds (with a maturity of ten to 30 years), while in Britain government
bonds are known as gilt-edged stock or just gilts.
Bonds are saleable instruments that can be traded on the secondary bond market. Banks and
brokerage companies act as market makers, quoting bid and offer prices for bonds with a very
small spread or difference between them. The price of bonds varies inversely with interest rates.
If interest rate rise, so that new borrowers have to pay a higher rate, existing bonds lose value.If
interest rate fall, existing bonds paying a higher interest rate than the market rate increase in
value. Consequently the yield of a bond-how much income it gives- depends on its purchase price
as well as its coupon.
Questions:
1. How do companies raise money to expand their operations?
2. Why are bonds, for investors, often safer than stocks or shares?
3. What happens if interest rate goes down?
4. What do companies usually do to find buyers of bonds?
IV. TRANSLATION: (2.0 pts.)
Translate the following sentences into Vietnamese.
1. Companies either distribute part of their profits to shareholders as an annual dividend.
2. Hedge funds are private investment funds for wealthy investors that trade in securities ans
derivatives, and try to get high returns whether markets move up or down.
3. An invoice is a list of goods that have been sold, work that has been done, etc., showing what
you must pay. 
4. Income is all the money received from business and investment activities during a given period.
V. WRITING: (2.0 pts.)
Build a complete sentence with the given words.
1. Cash flow/ the money/ generate/ an investment.
2. Company/ general/ use/ investment bank/ issue/ bonds.
3. Government/ also issue/ bond/ raise money/ and these/ consider/ a risk-free invest.
4. They/ wished/ make/ absolute/ return/ even if/ stock market/ fall.

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The end

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