unit 12: bond basics financial english unit 12: revision of unit 11revision of unit 11revision of...

Unit 12:Unit 12:

Bond BasicsBond Basics

Financial EnglishFinancial English

Unit 12:Unit 12:

• Revision of Unit 11

• Background information of Unit 12

• Text

• ExercisesExercises

• AssignmentAssignment

Review of Unit 11Review of Unit 11

• Dictation

• Exercises Check-upExercises Check-up

Blanks filling

Multiple Choices

DictationDictation

ⅠⅠ.Dictation!.Dictation!

You are going to hear 5 sentences. Each wilYou are going to hear 5 sentences. Each wil

ll

be read three times. Write down the sentences abe read three times. Write down the sentences a

ccording to what you hear.ccording to what you hear.

1.1. 2.2. 3.3. 4.4. 5.5.

Check-upCheck-up

Key to Dictation:Key to Dictation:

1.1. Some people consider playing the stock market to be a foSome people consider playing the stock market to be a form of gambling.rm of gambling.

2.2. AsAs a part owner of the company, you receive informa part owner of the company, you receive information about the company’s financial performance anation about the company’s financial performance and you have voting rights in determining who runs thd you have voting rights in determining who runs the company. e company.

3.3. Investors buy stocks with the belief that the company wilInvestors buy stocks with the belief that the company will grow continuously to raise the value of their shares.l grow continuously to raise the value of their shares.

4.4. Unlike common stock, preferred stock does not usuaUnlike common stock, preferred stock does not usually include voting rights and pays a specified dividenlly include voting rights and pays a specified dividend.d.

5.5. A bear market indicates the continuous downward moveA bear market indicates the continuous downward movement of the stock market.ment of the stock market.

DictationDictation

II. Fill in the blanks with proper words or phrases given below

Check-upCheck-up

dividend strategy dividend strategy flexibility flexibility

option option inflation return inflation return share share

fundfund invest invest opportunityopportunity

dividend strategy dividend strategy flexibility flexibility

option option inflation return inflation return share share

fundfund invest invest opportunityopportunity

Stock market investment gives you the unique ________ to take a Stock market investment gives you the unique ________ to take a

direct part in the growth and success of companies. When you buy _direct part in the growth and success of companies. When you buy _

_______ in a company, it means that you actually own a portion of th_______ in a company, it means that you actually own a portion of th

at company. As part owner, you benefit by receiving part of the profiat company. As part owner, you benefit by receiving part of the profi

ts or ________ and sharing in the growth of the value of the compants or ________ and sharing in the growth of the value of the compan

y. y.

The company benefits by raising ________ or capital when your s The company benefits by raising ________ or capital when your s

hares and other shares are first sold. These funds are used to operate hares and other shares are first sold. These funds are used to operate

and expand the business. and expand the business.

In general, share investments produce better ________ than fixed In general, share investments produce better ________ than fixed

interest investments, particularly when money is invested long term. interest investments, particularly when money is invested long term.

Check-upCheck-up

Stock market investment gives you the unique opportunity to tStock market investment gives you the unique opportunity to t

ake a direct part in the growth and success of companies. When yake a direct part in the growth and success of companies. When y

ou buy shares in a company, it means that you actually own a portou buy shares in a company, it means that you actually own a port

ion of that company. As part owner, you benefit by receiving part ion of that company. As part owner, you benefit by receiving part

of the profits or dividends and sharing in the growth of the value oof the profits or dividends and sharing in the growth of the value o

f the company. f the company.

The company benefits by raising funds or capital when your sh The company benefits by raising funds or capital when your sh

ares and other shares are first sold. These funds are used to operaares and other shares are first sold. These funds are used to opera

te and expand the business. te and expand the business.

In general, share investments produce better returns than fixed In general, share investments produce better returns than fixed

interest investments, particularly when money is invested long terinterest investments, particularly when money is invested long ter

m. m.

Check-upCheck-up

Although there are rises and falls in the stock market, historAlthough there are rises and falls in the stock market, histor

y shows that over the long term, the value of the stock market riy shows that over the long term, the value of the stock market ri

ses. In the US, which has a long history of deregulated stock mases. In the US, which has a long history of deregulated stock ma

rket, the average real return per annum after ________ is approrket, the average real return per annum after ________ is appro

ximately 10%. ximately 10%.

Direct investment in the stock market also gives you control Direct investment in the stock market also gives you control

over where you put your money. You decide which companies yover where you put your money. You decide which companies y

ou want to ________ in and when the time is right for you to see ou want to ________ in and when the time is right for you to see

your shares. If you want to be in control, stock market investmeyour shares. If you want to be in control, stock market investme

nt is a good ________. nt is a good ________.

Check-upCheck-up

Although there are rises and falls in the stock market, history sAlthough there are rises and falls in the stock market, history s

hows that over the long term, the value of the stock market rises. Ihows that over the long term, the value of the stock market rises. I

n the US, which has a long history of deregulated stock market, the n the US, which has a long history of deregulated stock market, the

average real return per annum after inflation is approximately 10average real return per annum after inflation is approximately 10

%. %.

Direct investment in the stock market also gives you control ove Direct investment in the stock market also gives you control ove

r where you put your money. You decide which companies you war where you put your money. You decide which companies you wa

nt to invest in and when the time is right for you to see your shares.nt to invest in and when the time is right for you to see your shares.

If you want to be in control, stock market investment is a good If you want to be in control, stock market investment is a good optopt

ion. ion.

Check-upCheck-up

Check-upCheck-up

Another attractive feature of stock market investment is thAnother attractive feature of stock market investment is th

e ________ to change your investments when your personal cire ________ to change your investments when your personal cir

cumstances change. For example, if you need money for a welcumstances change. For example, if you need money for a wel

l-earned break, an extension on our house or your children's el-earned break, an extension on our house or your children's e

ducation, all you need to do is sell your shares. ducation, all you need to do is sell your shares.

Stock market investment allows you to follow your investm Stock market investment allows you to follow your investm

ent. You'll receive regular information from companies you inent. You'll receive regular information from companies you in

vest in and can attend meetings. This enables you to gain a univest in and can attend meetings. This enables you to gain a uni

que insight into the results and ________ of the organization aque insight into the results and ________ of the organization a

nd learn a lot in the process. nd learn a lot in the process.

Check-upCheck-up

Another attractive feature of stock market investment is thAnother attractive feature of stock market investment is th

e flexibility to change your investments when your personal cire flexibility to change your investments when your personal cir

cumstances change. For example, if you need money for a welcumstances change. For example, if you need money for a wel

l-earned break, an extension on our house or your children's el-earned break, an extension on our house or your children's e

ducation, all you need to do is sell your shares. ducation, all you need to do is sell your shares.

Stock market investment allows you to follow your investme Stock market investment allows you to follow your investme

nt. You'll receive regular information from companies you invnt. You'll receive regular information from companies you inv

est in and can attend meetings. This enables you to gain a uniqest in and can attend meetings. This enables you to gain a uniq

ue insight into the results and strategies of the organization anue insight into the results and strategies of the organization an

d learn a lot in the process. d learn a lot in the process.

III. Choose the best answerIII. Choose the best answer

1. Most stocks are traded on ______.1. Most stocks are traded on ______.

A. primary marketsA. primary markets

B. secondary marketsB. secondary markets

C. credit marketsC. credit markets

D. capital marketsD. capital markets

Choose the best answerChoose the best answer

2. When an investor is buying stock as an investment, the value 2. When an investor is buying stock as an investment, the value

of most direct concern is______.of most direct concern is______.

A. par valueA. par value

B. Liquidation valueB. Liquidation value

C. market valueC. market value

D. book valueD. book value


33. According to diversification principle in investment, suppo

se you invest Stock X and Stock Y with equal funds, whic

h of the following is not true? ______.

A. If X and Y are totally independent with each other, the ris

k of the portfolio is reduced

B. B. If X and Y are perfectly negatively correlated, the risk

of the portfolio is perfectly offset

C. If X and Y are perfectly positively correlated, the risk of th

e portfolio is neither reduced nor increased

D. If X and Y are perfectly negatively correlated, the risk of t

he portfolio is neither reduced nor increased


4. An analyst estimates that a stock has the following probabili4. An analyst estimates that a stock has the following probabili

ties of return depending on the state of the economy:ties of return depending on the state of the economy:

State of economy Probability ReturnState of economy Probability Return

Good 0.1 15%Good 0.1 15%

Normal 0.6 13%Normal 0.6 13%

Poor 0.3 7%Poor 0.3 7%

The expected return of the stock is ______.The expected return of the stock is ______.

A. 7.8% A. 7.8% B. 11.4%B. 11.4%

C. 11.7% C. 11.7% D. 13.0% D. 13.0%


5. The holder of preference shares has preference over the o

rdinary shareholders under the following circumstance:

_______.

A. his voting rights are considered more important

B. he has the greater right in choosing the board of directo

rs

C. he receives his dividend before the ordinary shareholder

D. he has the right to buy ordinary shares more cheaply

Text : Background InformationText : Background Information

本章旨在介绍债券的基础知识。债券是国家、地方政府、上市公司，或私人公司为解决财政上的困难而发行的有价证券。债券的利息承诺是契约性的，不论债券人的财务状况如何，债券发行商均有义务于利息发布或债券到期当日，交付利息或本金予债券持有人。按发行主体，债券可分为政府债券，市政公债和企业债券。进行债券信用评级方便投资者进行债券投资决策，评级机构最著名的两家是美国标准 · 普尔公司和穆迪投资服务公司。提前赎回条款可以使发行者在预定时期内重新购买或者赎回债券。债券和股票从筹资的性质、存续时限、收益来源、价值的回归性和风险性上有所不同。

本章旨在介绍债券的基础知识。债券是国家、地方政府、上市公司，或私人公司为解决财政上的困难而发行的有价证券。债券的利息承诺是契约性的，不论债券人的财务状况如何，债券发行商均有义务于利息发布或债券到期当日，交付利息或本金予债券持有人。按发行主体，债券可分为政府债券，市政公债和企业债券。进行债券信用评级方便投资者进行债券投资决策，评级机构最著名的两家是美国标准 · 普尔公司和穆迪投资服务公司。提前赎回条款可以使发行者在预定时期内重新购买或者赎回债券。债券和股票从筹资的性质、存续时限、收益来源、价值的回归性和风险性上有所不同。

Text : Background InformationText : Background Information

本章重点 :

通过本章学习，学生应该掌握

● 债券的定义

● 债券的分类

● 如何计算债券收益

● 债券和股票的区别

本章重点 :

通过本章学习，学生应该掌握

● 债券的定义

● 债券的分类

● 如何计算债券收益

● 债券和股票的区别

Unit 12:Unit 12:

• Part I:

• 12.1 Introduction to Bond

• Part II:

• 12.2 Bond Market

• Part Ⅲ:

• 12.3 Differences between stocks and corporate bonds

ListeningListening

TextText

12.1 Introduction to Bond12.1 Introduction to Bond

12.1 Introduction to Bond12.1 Introduction to Bond

Listen carefully to the first part of the text and then Listen carefully to the first part of the text and then try to translate it. try to translate it.

• ListeningListening

• Text

• Language Points

TextText

● WHAT IS BOND?

A bond is a debt security, similar to an I.O.U. When you pu

rchase a bond, you are lending money to a government, munici

pality, corporation, federal agency or other entity known as the

issuer. In return for the loan, the issuer promises to pay you the

amount borrowed (called “principal”) at a designated future da

te plus a fixed amount of interest. Some bonds pay the interest

or coupon at designated intervals (i.e. on a specific date each ye

ar). Others pay both principal and interest when the bonds mat

ure at a specified date in the future.

Text :Text :

Once a bond is issued, it becomes a tradable commodity. Its v

alue on the open market will rise and fall as interest rates change

or as faith in the issuer changes. But when it reaches its maturity

date, any interim variations in price are of no consequence becau

se the bondholder receives the par value assuming that the issuer

is capable of repaying the loan..

Text :Text :

● ● WHY INVEST IN BONDS?

• Bonds provide a known rate of return. Thus bonds provide a s

teady, known income.

• Bonds return a known value on their maturity date. This prov

ides security for your money provided you hold the bond to matu

rity.

• Bond yields are generally superior to money market funds,

certificates of deposit, and bank accounts. Yields are related to

liquidity and risk. Since bonds vary in price during their life, you

could take a loss if you unexpectedly had to sell a bond prior to its

maturity. Also, the issuing company might go bankrupt and be un

able to repay the loan.

Text :Text :

• Government and municipal bonds can have tax advantages. In

general, it is in a nation’s interest that bonds issued by its governme

nt pay their coupons and pay the principal sum upon maturity, so th

at the credibility of the government remains strong and it can contin

ue to raise capital through the future issuance of bonds.

• Standard & Poor's and Moody's provide independent "safety"

ratings for corporate bonds. These ratings indicate how likely it is t

hat the bondholder will be able to repay the loan. Lower rating bon

ds have to provide higher yields to attract investors, but represent h

igher risk. Ratings provide a standardized and valuable tool for the

bond investor.

Text Text

● ● DIFFERENT TYPES OF BONDS

Bonds are classified according to their maturity terms as short-t

erm, medium-term or long-term. What constitutes short-term, medi

um-term or long-term debt securities vary from one rating agency to

another, and from one textbook to another. Some describe short-ter

m debt securities as those having maturities of one, three, or six mon

ths, usually less than a year. Medium-term bonds as having maturiti

es of between one to seven years, while long-term bonds, usually gov

ernment bonds as having maturities up to 30 years. There are other

rating agencies that classify short-term bonds as those with maturity

of one to five years, medium-term bonds as between five to twelve, a

nd long-term bonds as those above twelve years.

Text Text

In general, there are three main types of bonds:

Municipal Bonds

These are issued by state and local governments or their

agencies to pay for public improvements, reducing debt, or other

public purposes. If you buy bonds issued by your home state, you

will not have to pay state income tax or federal income tax (or city

tax, if you have one). If you buy bonds issued by another state, you

will not have to pay federal tax, but you will pay tax to your own

state (and city if applicable).

Text Text

Corporate Bonds

These are issued by corporations that want to raise money for their

business ventures, ranging from balancing their cash flow to buying

new equipment, building new facilities, or spending on new research.

Interest earned from corporate bonds is taxable, so they tend to pay

higher rates than government or municipal bonds, which have some tax

benefits. Corporate bonds are often considered appropriate investments

for the bond portion of your retirement plan investments, because you

get the higher interest and still aren't taxed until the earnings are

withdrawn. A municipal or government bond will pay you less interest

and already offers a tax benefit, so they offer less incentive to include

them in your retirement portfolio.

Text Text

Government Bonds

Government bonds are those issued by the federal government

or one of its agencies. From a credit perspective, these are the safest

of all investments because they're backed by the "full faith and

credit" of the U.S. government; so unless the U.S. goes bankrupt,

you're guaranteed to get your money back.

Text Text

Common types of U.S. government bonds include Treasuries

and Savings Bonds.

☆ Treasuries

Treasury bills, notes, and bonds are collectively called

"Treasuries."

Treasury bills (T-bills): These are short-term securities that

mature in a year or less. You buy them at a discount price and at

the end of the term, you're repaid the full price. The difference is

what constitutes your earnings. These earnings are exempt from

local and state income taxes, but must be reported on your federal

tax return.

Text Text

Treasury notes: These are issued for the intermediate term,

such as 2 years up to 10 years. Expect to earn a little higher interest

rate than what you could get from a T-bill. Interest is paid every six

months. Earnings are exempt from local and state income taxes but

must be reported on your federal tax return. You can sell your

Treasury note before it matures, if you wish.

Treasury bonds: These are issued for the long-term, generally

from 10 years to 30 years. Expect to earn a higher interest rate than

what you could get from a T-note. Interest is paid every six months.

Earnings are exempt from local and state income taxes but must be

reported on your federal tax return. You can sell your Treasury

bond before it matures, if you wish.

Text Text

☆ ☆ Savings BondsSavings Bonds

Savings bonds are government bonds designed especially for Savings bonds are government bonds designed especially for

individual investors. As such, they can generally only be individual investors. As such, they can generally only be redeemed ed

by their original owner, except in limited circumstances.by their original owner, except in limited circumstances.

Text Text

● ● THE ISSUERSTHE ISSUERS

A key feature of a bond is the nature of the issuer. Bonds ca

n be issued by either governments or corporations. Before its iss

uance, the bond usually had to go through specialized companies

for assessment of the issuer’s credit standing. Such companies, li

ke Standard&Poor Corp. and Moody’s Investment Service Cor

p., are mostly located in international security centers.

The state of an issuer’s credit standing will be listed accordin

g to its rating, with the best as 3A and the worst as C or D. issuer

s, with creditworthy grades, will enjoy favor in deciding the bon

d interest rate.

Text Text

Text : Language PointsText : Language Points

I.O.U. I owe youI.O.U. I owe you

To the Finance office of the University I. O. U five tho

usand yuan only.

今借到院财务处人民币五千元整。

I.O.U. I owe youI.O.U. I owe you

To the Finance office of the University I. O. U five tho

usand yuan only.

今借到院财务处人民币五千元整。


in return for 作为 ... 的报答

someone who earn wages in return for their labor. someone who earn wages in return for their labor.

用工作来换取工资的人。用工作来换取工资的人。

action taken in return for an injury or offense. action taken in return for an injury or offense.

偿还伤害或攻击的行为。偿还伤害或攻击的行为。

An answer or response in return for something done. An answer or response in return for something done.

答谢，致谢为回报已做事情的答复或回复答谢，致谢为回报已做事情的答复或回复

in return for 作为 ... 的报答

someone who earn wages in return for their labor. someone who earn wages in return for their labor.

用工作来换取工资的人。用工作来换取工资的人。

action taken in return for an injury or offense. action taken in return for an injury or offense.

偿还伤害或攻击的行为。偿还伤害或攻击的行为。

An answer or response in return for something done. An answer or response in return for something done.

答谢，致谢为回报已做事情的答复或回复答谢，致谢为回报已做事情的答复或回复


principal principal 本金本金

calculate principal and interest.

以本金和不断累计的利息为基数计算利息。

principal principal 本金本金

calculate principal and interest.

以本金和不断累计的利息为基数计算利息。


coupon （公债等的）息票

This coupon can redeem at any of our branch.

这种息票可在我们的任何分行兑现 .

In Singapore, for example, a government bond matuIn Singapore, for example, a government bond matu

ring in 2004 with a coupon of 3.5% will currently yiering in 2004 with a coupon of 3.5% will currently yie

ld about 3.4%. ld about 3.4%.

举例说，在新加坡，一个举例说，在新加坡，一个 20042004 年到期，息票利率为年到期，息票利率为3.5%3.5% 的政府债券，目前能提供的收益大概是的政府债券，目前能提供的收益大概是 3.4%3.4% 。。

coupon （公债等的）息票

This coupon can redeem at any of our branch.

这种息票可在我们的任何分行兑现 .

In Singapore, for example, a government bond matuIn Singapore, for example, a government bond matu

ring in 2004 with a coupon of 3.5% will currently yiering in 2004 with a coupon of 3.5% will currently yie

ld about 3.4%. ld about 3.4%.

举例说，在新加坡，一个举例说，在新加坡，一个 20042004 年到期，息票利率为年到期，息票利率为3.5%3.5% 的政府债券，目前能提供的收益大概是的政府债券，目前能提供的收益大概是 3.4%3.4% 。。


maturity ( 债务、票据等的 ) 到期 ; 到期日

a dividend paid in addition to the regular dividend.

固定股息之外另发的股利

The company raised its dividend by 10%.

公司提高股息 10 ％。

These show the dividend amount and the exdividend date. These show the dividend amount and the exdividend date.

它们会显示股息额和除权日期。它们会显示股息额和除权日期。

We pay a dividend of 10 per cent. We pay a dividend of 10 per cent.

我们所付的股息为我们所付的股息为 10%10% 。。

maturity ( 债务、票据等的 ) 到期 ; 到期日

a dividend paid in addition to the regular dividend.

固定股息之外另发的股利

The company raised its dividend by 10%.

公司提高股息 10 ％。

These show the dividend amount and the exdividend date. These show the dividend amount and the exdividend date.

它们会显示股息额和除权日期。它们会显示股息额和除权日期。

We pay a dividend of 10 per cent. We pay a dividend of 10 per cent.

我们所付的股息为我们所付的股息为 10%10% 。。


yield 产量；收成；收益

This year's yield from the coal mine was very large. This year's yield from the coal mine was very large.

今年这煤矿产量甚丰。今年这煤矿产量甚丰。

Bonds that yield well. Bonds that yield well.

获利很多的债券获利很多的债券

yield 产量；收成；收益

This year's yield from the coal mine was very large. This year's yield from the coal mine was very large.

今年这煤矿产量甚丰。今年这煤矿产量甚丰。

Bonds that yield well. Bonds that yield well.

获利很多的债券获利很多的债券


certificate of deposit 存款单

I understand time certificate of deposit pays a higher rat

e of interest than regular deposits do.

据说定期存款的利率比一般存款高。

There are several categories of time deposits in the US. Fi

rst, CDs (certificate of deposit) of $ 100, 000 or more, whi

ch are primarily large negotiable certificates of deposit of

corporations.

在美国，定期存款分为几类：第一， 10万美元以上 (含10万美元 ) 的存单，主要是由公司持有的大面额可转让存单构成。

certificate of deposit 存款单

I understand time certificate of deposit pays a higher rat

e of interest than regular deposits do.

据说定期存款的利率比一般存款高。

There are several categories of time deposits in the US. Fi

rst, CDs (certificate of deposit) of $ 100, 000 or more, whi

ch are primarily large negotiable certificates of deposit of

corporations.

在美国，定期存款分为几类：第一， 10万美元以上 (含10万美元 ) 的存单，主要是由公司持有的大面额可转让存单构成。


bank account 银行存款 , 银行往来帐My bank account stands at ￡ 550. 我的银行存款有五百五十镑。

I have an account with Midland Bank. 我在米德兰银行开有户头。

He have a non- resident bank account. He have a non- resident bank account. 他有一个非本国居民银行帐户。他有一个非本国居民银行帐户。

She kept her bank account open. She kept her bank account open. 她的银行帐户随时可以使用。她的银行帐户随时可以使用。

bank account 银行存款 , 银行往来帐My bank account stands at ￡ 550. 我的银行存款有五百五十镑。

I have an account with Midland Bank. 我在米德兰银行开有户头。

He have a non- resident bank account. He have a non- resident bank account. 他有一个非本国居民银行帐户。他有一个非本国居民银行帐户。

She kept her bank account open. She kept her bank account open. 她的银行帐户随时可以使用。她的银行帐户随时可以使用。


liquidity 流动性 , 流畅

The bank has progressively increased its liquidity. The bank has progressively increased its liquidity. 银行逐渐地增加其流动资产。银行逐渐地增加其流动资产。

They are largely held by financial institutions for trading and liquidity management purposes. 这些债券大部分由金融机构持有，以用作买卖及管理流动资金的需要。

This permits their trading on an exchange thus enhancing liqThis permits their trading on an exchange thus enhancing liquidity. uidity. 它们能在交易所交易，增加流量。它们能在交易所交易，增加流量。

liquidity 流动性 , 流畅

The bank has progressively increased its liquidity. The bank has progressively increased its liquidity. 银行逐渐地增加其流动资产。银行逐渐地增加其流动资产。

They are largely held by financial institutions for trading and liquidity management purposes. 这些债券大部分由金融机构持有，以用作买卖及管理流动资金的需要。

This permits their trading on an exchange thus enhancing liqThis permits their trading on an exchange thus enhancing liquidity. uidity. 它们能在交易所交易，增加流量。它们能在交易所交易，增加流量。


go bankrupt go bankrupt 破产破产

He go bankrupt after two year in business. 经商两年后他破产了。

Unless he pumps more funds in, the firm will go bankrupt. 若他不投入更多资金，公司将破产。

We have to produce new products to get out of the red otherwise we will go bankrupt. 我们应该生产新产品来谋求盈余，否则我们就会破产了。

go bankrupt go bankrupt 破产破产

He go bankrupt after two year in business. 经商两年后他破产了。

Unless he pumps more funds in, the firm will go bankrupt. 若他不投入更多资金，公司将破产。

We have to produce new products to get out of the red otherwise we will go bankrupt. 我们应该生产新产品来谋求盈余，否则我们就会破产了。


government bond 政府债券 For example, in Singapore, current short-term fixed deposit rates are now about 1%, compared with 3% for a 5-year Singapore government bond and 3.6% for a 5-year HDB bond. 例如，在新加坡，目前的短期定期存款利率大约是 1% ，而 5年期政府债券是 3% ， 5 年期建屋发展局债券是 3.6% 。

Bonds, measured by the UOB Government Bond Index, are less volatile although the probability of earning higher returns than equities is lower. 以大华银行政府债券指数衡量的债券，虽然赚取比股票高的回报的可能性低，但是波动比较没有那么大。

government bond 政府债券 For example, in Singapore, current short-term fixed deposit rates are now about 1%, compared with 3% for a 5-year Singapore government bond and 3.6% for a 5-year HDB bond. 例如，在新加坡，目前的短期定期存款利率大约是 1% ，而 5年期政府债券是 3% ， 5 年期建屋发展局债券是 3.6% 。

Bonds, measured by the UOB Government Bond Index, are less volatile although the probability of earning higher returns than equities is lower. 以大华银行政府债券指数衡量的债券，虽然赚取比股票高的回报的可能性低，但是波动比较没有那么大。

municipal bondmunicipal bond 市政公债市政公债municipal bondmunicipal bond 市政公债市政公债


corporate bond 公司债券

Investors looking for a medium-to low-risk route to income in-vesting are increasingly turning to the corporate bond market as an alternative to equities and government bonds. 为收入而投资，但只接受中低风险者，很多都转向公司债券，以替代股票和政府债券。

The corporate bond market in Singapore is likely to develop in botThe corporate bond market in Singapore is likely to develop in both the variety of stock available and the liquidity of the secondary mh the variety of stock available and the liquidity of the secondary market. arket. 新加坡的公司债券市场预料会得到发展，以致证券种类更多，二新加坡的公司债券市场预料会得到发展，以致证券种类更多，二手市场流通性更大。手市场流通性更大。

corporate bond 公司债券

Investors looking for a medium-to low-risk route to income in-vesting are increasingly turning to the corporate bond market as an alternative to equities and government bonds. 为收入而投资，但只接受中低风险者，很多都转向公司债券，以替代股票和政府债券。

The corporate bond market in Singapore is likely to develop in botThe corporate bond market in Singapore is likely to develop in both the variety of stock available and the liquidity of the secondary mh the variety of stock available and the liquidity of the secondary market. arket. 新加坡的公司债券市场预料会得到发展，以致证券种类更多，二新加坡的公司债券市场预料会得到发展，以致证券种类更多，二手市场流通性更大。手市场流通性更大。


portfolio (保险 ) 业务量 , 业务责任 ; 有价证券 (组合 )

Portfolio investment in the form of ‘China funds’ is also popular. “中国基金”形式的投资组合亦颇受欢迎。

International portfolio investments are financial investments made in foreign countries. 国际有价证券投资指在别国进行的金融投资。

My stockbroker manages my portfolio for me. 我的证券经纪人替我管理投资组合

portfolio (保险 ) 业务量 , 业务责任 ; 有价证券 (组合 )

Portfolio investment in the form of ‘China funds’ is also popular. “中国基金”形式的投资组合亦颇受欢迎。

International portfolio investments are financial investments made in foreign countries. 国际有价证券投资指在别国进行的金融投资。

My stockbroker manages my portfolio for me. 我的证券经纪人替我管理投资组合


savings bond 储蓄公债

Tom's parents gave him a savings bond for his marriage. Tom's parents gave him a savings bond for his marriage.

汤姆的父母亲给他储蓄公债做为他的结婚礼物。汤姆的父母亲给他储蓄公债做为他的结婚礼物。

savings bond 储蓄公债

Tom's parents gave him a savings bond for his marriage. Tom's parents gave him a savings bond for his marriage.

汤姆的父母亲给他储蓄公债做为他的结婚礼物。汤姆的父母亲给他储蓄公债做为他的结婚礼物。

treasury bill 国库券，财政部库券。

treasury notes ( 美国的 )中期国库券或政府债券

treasury bonds ( 美国的 )长期国库券或政府债券



exempt from 免除 , 豁免

Food is exempt from sale tax. 食品可免销售税。

Religious organizations are exempt from taxation. 宗教机构被免除赋税。

He is exempt from punishment about this thing. He is exempt from punishment about this thing. 关于此事对他已免于处分。关于此事对他已免于处分。

exempt from 免除 , 豁免

Food is exempt from sale tax. 食品可免销售税。

Religious organizations are exempt from taxation. 宗教机构被免除赋税。

He is exempt from punishment about this thing. He is exempt from punishment about this thing. 关于此事对他已免于处分。关于此事对他已免于处分。


redeem 赎回 , 挽回 , 恢复 , 补偿 , 兑换

This coupon can is redeem at any of our branch. 这种息票可在我们的任何分行兑现。

How much must I pay to redeem my necklace from pawn? 赎回我的项链要花多少钱

redeem 赎回 , 挽回 , 恢复 , 补偿 , 兑换

This coupon can is redeem at any of our branch. 这种息票可在我们的任何分行兑现。

How much must I pay to redeem my necklace from pawn? 赎回我的项链要花多少钱

ListeningListening

TextText

12.2 Bond Market12.2 Bond Market 12.2 Bond Market12.2 Bond Market

Listen carefully to the second part of the text and thListen carefully to the second part of the text and then try to translate it. en try to translate it.

• ListeningListening

• TextText

• Language Points

TextText

● HOW ARE BONDS TRADED?

There are two main markets for bonds:

· primary market: bonds sold for the first time

· secondary market: the resale of bonds some time after their initial

offering

When the issuer (government or corporations) first offers new issu

es, that first trading is done at the primary market. What this means i

s that the issuer is able to raise funds for its use and the money raised

from the sale of the bonds come directly to the issuer. Subsequently, t

he bonds bought from the issuer can be bought and sold among other

investors, and this is referred to as the secondary market.

Text Text

The secondary market provides liquidity to the individuals o

r institutions that have acquired the bonds, which are now able

to sell off the bonds before the maturity date, should they wish t

o do so. The trading of bonds in the secondary market creates a

market pricing of the bonds that depends on the supply and de

mand of the bonds, and prevailing interest rates, among other f

actors. When the market price of the bond is less than its par va

lue, the bond is considered as being sold at a discount. When the

market price of the bond is more than its par value, then the bo

nd is being sold at a premium.

Text Text

●●HOW MUCH WILL YOU EARN?

The amount that you earn will be based on the bond's face value,

coupon rate and yield.

The face value, or par value, of a bond is the value of the bond at

maturity, the date when the loan is paid off. A common face value is

$1,000 per bond. It's important to keep in mind that the actual

market price of a bond may be higher or lower than the bond's face

value. A bond's market price can fluctuate over time, depending on a

variety of factors including investor demand, interest rate movement,

the bond's maturity date and the creditworthiness of the issuer.

Text Text

A bond's coupon rate refers to the amount of interest that will A bond's coupon rate refers to the amount of interest that will

be paid based on the face value of the bond. Interest may be divided be paid based on the face value of the bond. Interest may be divided

into quarterly, semiannual or annual payments, depending on the into quarterly, semiannual or annual payments, depending on the

issuer and the individual bond. issuer and the individual bond. For example, if the For example, if the nominal value of tvalue of t

he bond is RMB100,000 and the coupon rate is 7%, then the bondholhe bond is RMB100,000 and the coupon rate is 7%, then the bondhol

der will receive an annual interest of RMB7,000. If the agreed periodder will receive an annual interest of RMB7,000. If the agreed period

ic payment is every six months, then the bondholder will receive RMic payment is every six months, then the bondholder will receive RM

B3,500 every six months. A rate that stays as a fixed percentage of thB3,500 every six months. A rate that stays as a fixed percentage of th

e par value like this is a fixed-rate bond. Another possibility is an adje par value like this is a fixed-rate bond. Another possibility is an adj

ustable interest payment, known as a floating-rate bond. In this case ustable interest payment, known as a floating-rate bond. In this case

the coupon rate is tied to market rates through an index such as the the coupon rate is tied to market rates through an index such as the

rate on Treasury bills. rate on Treasury bills.

Text Text

You might think investors will pay more for a high coupon tha

n a low coupon. All things being equal, a lower coupon means that

the price of the bond will fluctuate more.

There is often confusion between the yield and the coupon rate

of a bond. While the coupon rate is fixed at issue, and does not ch

ange till maturity, the yield is the discount rate or interest rate that

an investor wants from investing in a bond. Price bonds are quote

d in relation to their yields. As the required yield increases, the pr

ice of the bond decreases. The reverse is also true.

Text Text

If you purchase a bond at face value, your coupon rate and If you purchase a bond at face value, your coupon rate and

actual earned yield will be the same. However, bonds are often sold actual earned yield will be the same. However, bonds are often sold

at higher or lower prices than their face values. As a result, your at higher or lower prices than their face values. As a result, your

actual yield can be different from the bond's coupon rate. Buying a actual yield can be different from the bond's coupon rate. Buying a

bond at a discount, or less than its face value, results in a higher bond at a discount, or less than its face value, results in a higher

yield than the stated coupon rate. In contrast, buying a bond at a yield than the stated coupon rate. In contrast, buying a bond at a

premium, or more than its face value, results in a lower yield than premium, or more than its face value, results in a lower yield than

the stated coupon rate.the stated coupon rate.

Text Text

primary market 一级市场

secondary market 二级市场


at a premium 在票面价值以上 , 非常珍贵


Shares are selling at a premium. 股票按超出票面价值出售

Experienced personal assistants are always at a premium. 有经验的私人助手总很难找到。

If you're a student,time is at a premium. If you're a student,time is at a premium. 如果你是一个学生，时间是宝贵的。如果你是一个学生，时间是宝贵的。

Shares are selling at a premium. 股票按超出票面价值出售

Experienced personal assistants are always at a premium. 有经验的私人助手总很难找到。

If you're a student,time is at a premium. If you're a student,time is at a premium. 如果你是一个学生，时间是宝贵的。如果你是一个学生，时间是宝贵的。

pay offpay off 还清还清 (( 债务等债务等 )) 付清付清 , , 报复报复 , , 赢利赢利


I ‘ll pay you off for your insult! 我要报复你对我的侮辱

Joel wanted to pay Wailliam off for backbiting him. 乔尔因威康在背后说他坏话而要施行报复。

Next he undertook to pay off the debts. 然后，他同意负责偿还债务。

I ‘ll pay you off for your insult! 我要报复你对我的侮辱

Joel wanted to pay Wailliam off for backbiting him. 乔尔因威康在背后说他坏话而要施行报复。

Next he undertook to pay off the debts. 然后，他同意负责偿还债务。

nominal 票面上的 , 名义上的


The old man is only the nominal head of the business.

那老人只是这个企业的挂名的总裁。

nominal demand for money and actual demand for money

名义货币需求与实际货币需求

a nominal par 票面价格

The old man is only the nominal head of the business.

那老人只是这个企业的挂名的总裁。

nominal demand for money and actual demand for money

名义货币需求与实际货币需求

a nominal par 票面价格

discount rate 贴现率 , 折现率 , 外汇汇率


the discount rate fixed by a central bank. 中央银行规定的贴现率。

They receive slightly better discount rate from the bank of England.

他们从英格兰银行得到略为好的贴现率。

The interest deducted prior to purchasing, selling, or lending a comThe interest deducted prior to purchasing, selling, or lending a commercial paper; the discount rate. mercial paper; the discount rate. 贴现率在购买、出售或贷款的商业票据前削减利息；贴现率贴现率在购买、出售或贷款的商业票据前削减利息；贴现率

the discount rate fixed by a central bank. 中央银行规定的贴现率。

They receive slightly better discount rate from the bank of England.

他们从英格兰银行得到略为好的贴现率。

The interest deducted prior to purchasing, selling, or lending a comThe interest deducted prior to purchasing, selling, or lending a commercial paper; the discount rate. mercial paper; the discount rate. 贴现率在购买、出售或贷款的商业票据前削减利息；贴现率贴现率在购买、出售或贷款的商业票据前削减利息；贴现率

ListeningListening

TextText

12.3 12.3 Differences between stocks Differences between stocks

and corporate bondsand corporate bonds

12.3 12.3 Differences between stocks Differences between stocks

and corporate bondsand corporate bonds

Listen carefully to the second part of the text and thListen carefully to the second part of the text and then try to translate it. en try to translate it.

The differences between stocks and bonds can be summarized int

o the following six points:

1. Stocks are written evidence of ownership, while bonds are written

evidence of debts.

2. Stocks such as common stocks do not have a fixed dividend. In con

trast, bonds normally have a fixed interest or income.

3. Stockholders can elect a board of directors which controls the cor

poration. Bond holders have no voice in or control over management

of the corporation.

Text Text

4. Stocks don’t have a maturity date, because the corporation does

not ususally repay the stockholders. Bonds have a maturity date w

hen the corporation is to repay the bondholder the face value of the

bond sometimes plus the total interests.

5.All corporations issue or offer to sell stocks, but corporations do n

ot necessarily always issue bonds.

6. Stockholders have a claim against the property and income of a c

orporation after all creditors’ claims have been met. Bondholders

have a claim against the property and income of a corporation that

must be met before the claims of stockholders.

Text Text

Bonds do not have the long term growth potential of stocks bu

t can provide steady income and security of capital if held to matu

rity. Because of this, bonds are recommended as an increasing pe

rcentage of a portfolio as the portfolio owner becomes older. How

ever, bonds are not fixed value investments since their market val

ue can change with interest rates especially when far away from

maturity dates.

Text Text

Ⅰ. Explain the following terms:

bonds

face value

government bond

treasury bill

secondary market

Exercises Exercises

Check-upCheck-upCheck-upCheck-up


Exercises Exercises

1. A bond is a debt security, similar to an I.O.U. When you pu

rchase a bond, you are lending money to a government, mu

nicipality, corporation, federal agency or other entity know

n as the issuer. In return for the loan, the issuer promises to

pay you the amount borrowed (called “principal”) at a desi

gnated future date plus a fixed amount of interest.

2. Face value is the value imprinted on a security, such as a st

ock certificate or bond, used to calculate a payment, such as

a dividend or interest.

1. A bond is a debt security, similar to an I.O.U. When you pu

rchase a bond, you are lending money to a government, mu

nicipality, corporation, federal agency or other entity know

n as the issuer. In return for the loan, the issuer promises to

pay you the amount borrowed (called “principal”) at a desi

gnated future date plus a fixed amount of interest.

2. Face value is the value imprinted on a security, such as a st

ock certificate or bond, used to calculate a payment, such as

a dividend or interest.

Exercises Exercises

3. Government bonds are those issued by the federal

government or one of its agencies.

4. Treasury bills are short-term securities that mature in a year 4. Treasury bills are short-term securities that mature in a year

or less. You buy them at a discount price and at the end of or less. You buy them at a discount price and at the end of

the term, you're repaid the full price.the term, you're repaid the full price.

5. Secondary market refers to the resale of bonds some time aft5. Secondary market refers to the resale of bonds some time aft

er their initial offering.er their initial offering.

3. Government bonds are those issued by the federal

government or one of its agencies.

4. Treasury bills are short-term securities that mature in a year 4. Treasury bills are short-term securities that mature in a year

or less. You buy them at a discount price and at the end of or less. You buy them at a discount price and at the end of

the term, you're repaid the full price.the term, you're repaid the full price.

5. Secondary market refers to the resale of bonds some time aft5. Secondary market refers to the resale of bonds some time aft

er their initial offering.er their initial offering.

Ⅱ. True or False

( ) 1. Bonds with a redemption provision usually have a lower an

nual return.

( ) 2. Interest earned from corporate bonds is taxable, but most

of the time they will have some tax benefits.

( ) 3. Bond market prices and interest rates are directly related.

Exercises Exercises

Ⅱ. True or False

( F ) 1. Bonds with a redemption provision usually have a lower a

nnual return.

( F ) 2. Interest earned from corporate bonds is taxable, but most

of the time they will have some tax benefits.

( T ) 3. Bond market prices and interest rates are directly related.

Exercises Exercises

( ) 4. Investors of bonds are quite clear about the exact amount o

f cash they will get back, provided they hold these securities u

ntil maturity.

( ) 5. If a bond is capitalized over a period greater than one year

(one period), it involves the calculation of compound interest.

Exercises Exercises

( T ) 4. Investors of bonds are quite clear about the exact amount

of cash they will get back, provided they hold these securities

until maturity.

( F ) 5. If a bond is capitalized over a period greater than one yea

r (one period), it involves the calculation of compound interes

t.

Exercises Exercises

ExercisesExercises

III. Translate the following English sentences into Chinese.

1. Bonds are known as fixed-income investments, because the yiel

d to maturity is predetermined.

2. Corporate bonds are debt contracts requiring borrowers to ma

ke periodic payments of interest and repay principal at the matur

ity date.

3. A rating change can reflect a variety of events that affecting th

e ability of an issuer to repay the principal and interest on its debt.


ExercisesExercises

4. When the coupon rate is lower than prevailing interest rate

s, the bond will sell at a discount from its face values.

5. Issuing Treasury securities is a means for government to re

gulate the money supply.


ExercisesExercises

1. 债券投资被成为固定收入投资，因为到期收益是预先确定了的。

2. 公司债券就是要求借款人在兑换日期结束时按期偿还本金并支付定期的利息的债务合同。

3. 债券级别的变化可以反应出一系列影响债券发行人的偿还本金的能力和债务利息的能力的事件。

1. 债券投资被成为固定收入投资，因为到期收益是预先确定了的。

2. 公司债券就是要求借款人在兑换日期结束时按期偿还本金并支付定期的利息的债务合同。

3. 债券级别的变化可以反应出一系列影响债券发行人的偿还本金的能力和债务利息的能力的事件。

ExercisesExercises

4. 当息票率低于现行利率水平时，债券的卖出价格将低于其券面的价值。

5. 发行国库券是政府调节货币供给的一种手段。

4. 当息票率低于现行利率水平时，债券的卖出价格将低于其券面的价值。

5. 发行国库券是政府调节货币供给的一种手段。

ExercisesExercises

IVIV．． Use your own words to name out the differences between bUse your own words to name out the differences between b

onds and stocksonds and stocks

AssignmentsAssignments

1.1. Review the Text .Review the Text .

2.2. Keep in mind the special teKeep in mind the special te

rms learned in this Unit.rms learned in this Unit.

3.3. Do exercises in the book.Do exercises in the book.

unit 12: bond basics financial english unit 12: revision of unit 11revision of unit 11revision of...

Documents

company benefits

revision of unit

checkup slide

background information

dictation slide

review of unit

opportunity slide

stock market investment