Exercises to the text

I

Find the proper answer:

1. "foreign exchange dealings":

a) financial operations connected with settling payments
in foreign trade as well as international money and capi­
tal movements,

b) concluding agreements with foreign firms,

c) converting one currency into another.

2. "the yen which the Japanese businessman has available":

a) wants to exchange,

b) has in abundance,

c) has at his disposal.

3. "foreign exchange deals spring from":

a) refer to,

b) are the result of, -*

c) imply.

4. "placed to the credit of:

a) entered on the credit side of an account,

b) considered to be favourable for, \

c) a credit granted to. \

5. "the operation in reverse": Y

a) conversion of foreign exchange into the currency of a
given country, <

b) conversion of bank notes into foreign exchange,

c) remitting bank notes abroad.

6. "a currency is usually called convertible":

a) only residents of a country can remit their payments
abroad,

b) it can be changed into any other currency without any
restrictions, \

c) non-resident can instruct the bank to convert their earn­
ings into any other currency.

7. "a person domiciled in Britain":

a) one being on a business trip,

b) one living permanently in,

c) one touring the country.

8. "the proceeds":

a) money arising from converting one currency into
another,

b) earnings from the export of goods,

c) foreign currency held with banks abroad.

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9. "except with the consent of the Bank of England":

a) provided you apply for a permission to the Bank of
England,

b) only in case the Bank of England grants a permission,

c) only if one has an account with the Bank of England.
1.0. "the latter":

a) funds arising both from current transactions and finan­
cial operations,

b) funds arising from current transactions,

c) funds arising from purely financial operations.

11. "being subject..... to a restriction on convertibility":

a) being externally convertible,

b) being freely convertible,

c) being under control of exchange regulations.

12, "two-tier markets":

a) economies which draw distinctions between current
transactions and financial operations as regards ex­
change regulations,

b) two-storey department stores,

c) oeonomies permitting free money and capital move­
ments.

6. A person domiciled in Britain can as a general rule ex­
port capital only wilh the consent of the Bank of En­
gland.

7. In Belgium funds arising from current transactions are
subject to a restriction on convertibility.

Ill

Answer the following questions:

1. What is the basis of foreign exchange dealings?

2. What would a Japanese buyer have to do if he wanted to
purchase a machine from a Swiss exporter?

3. What would happen to foreign exchange dealings if a
single world currency were created?

4. How would you define "foreign currency''?

5. What is the job of a foreign exchange dealer?

6. On what condition do foreign bank notes liecome foreign
exchange?

7. What is a fully convertible currency?

8. What is a partially convertible currency?

9. Give examples of currencies which are fully convertible
and partially convertible.

II

Say what is true and what is false. Correct Hie. false, sen te,nce.s:~

1. To facilitate foreign exchange dealings single world cur­
rency should be created.

2. In the trading of foreign exchange between banks only
foreign currency held with banks abroad is concerned.

3. Foreign bank notes are foreign exchange.

4. The conversion of foreign exchange into bank notes of
the given country is nearly always permitted.

5. The holder of Swiss francs can convert them into other
currencies provided he is a resident of Switzerland.

IV

Vocabulary study. Supply the missing member of the, pair in each case:

96

4 1619

97

Collocation. Find the nouns which are qualified in the text
by these adjectives and write one. noun to each adjective:
convertible international

current local

domestic ordinary

external partial

financial unrestricted

foreign

VI

Combine the. words listed below into meaningful two or
three word expressions as possible. Some are used in Hie
text (capital movement, foreign exchange dealings).
business foreign

bank money

capital movement

currency market

dealings notes

dealer regulation

exchange two-tier

Eurodollar world

VII

For each of the following phrases find the expression in the text which it explains and note, that expression.

1. International trade and international money and capital
movements.

2. Extra money held by a bank.

3. Money used within a country.

4. Money in circulation abroad.

5. Funds, bills, cheques held with banks abroad in foreign
currency and payable abroad.

6. A currency that can be changed freely into any other
currency.

7. Money coming from the sale of goods and services.

VIII

Complete the following sentences in English:

1. If a bank wants to place excess funds in the Eurodollar
market......

2. Foreign bank notes can become foreign exchange provided

3. A currency is called convertible if..... \

4. Sterling funds are partially convertible because only...

5. In Belgium, France and Italy a distinclio\i is drawn be­
tween....... \

IX

Demonstrate the meaning of each of the following expres­sions in sentences of your own:

1. to conclude the transactions ,- — '" ' '

2. to place excess funds [

3. to buy dollars against local currency

4. to convert into

5. to remit the proceeds abroad

6. to export capital

7. to be subject to a restriction

8. to be fully (partially) convertible

X

In the sentences of this text every sixth word has been left out. Write in the word that fits best:

The Foreign-Exchange market is..... market which has

no central..... place, but operates through the..... offices of

the banks concerned.... overseas trade. The main preoccu-

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pation.... the foreign-exchange dealers is... secure sup­
plies of foreign currency.... required lo finance interna­
tional trade..... price of foreign currencies, like.... prices,

is determined by the.... for that currency and the..... of it.

The demand for..... currency depends on the demand....

that country's goods and services..... foreigners, and the

supply of... currency depends on how many... goods and

services its home.... wish to buy. Capital movements......

also affect the exchange rale.... making supplies of a cur­
rency.... on lorig-lerm loans or

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