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Writing Skills Review

Lesson outline
 Structure

stories

sentences, paragraphs,

 Using

financial terms correctly the right numbers

 Choosing  Putting

context

numbers into the right

Good verbs show action

Japanese Yen continues to be weak against Euro. On July 12, Yen hit the all-time lowest record against Euro at 168.70 in New York. Yen is also weak against US dollar overall since early this year. Japanese Yen weak against Euro. On July 12, Yen all-time lowest record against Euro at 168.70 in New York. Yen also weak against US dollar overall since early this year. The yen fell for fifth day in seven against the euro, dropping to a record low of 168.7 yen to the euro in New York.

Good subjects do action

One of the reasons could be a low interest rate of Yen and yen is not attractive for investors.

A low interest rate of Yen and yen is not attractive for investors. Investors may have sold the yen because interest rates in Japan, the lowest among major industrialized nations, cut returns on bonds and bank deposits.

Numbers in context

Interest rate at an ordinary deposit in Japanese Yen is around 0.2% where that in US dollar is 0.5%. The official discount rate has been set at 0.75% since February 21 this year, while LIBOR is 1.00188 to Yen. Yen deposits earn 0.2%, less than half the 0.5% for dollar-denominated bank savings.

Monetize
 A.

To convert into cash.  B. To set interest-rate policy.  C. To increase profit.

Convertible Bonds
 A.

Bonds with a floating interest rate.  B. Bonds that can be converted to stock. C. Bonds that can be converted to a longer or shorter maturity.

Credit Spread
 A.

The amount of collateral used to gain credit, or borrow.  B. The difference between money invested in stocks and money invested in bonds.  C. The difference in yield between two securities, typically a U.S. treasury and a corporate bond.  

Par Value
 A.

The amount of interest a bond pays the first year.  B. The principal amount of a bond or note due at maturity.  C. A type of golf bond.

Capital ratio
A. The amount of money a bank has invested in bonds compared with the amount in stocks and other securities.  B. The amount of capital a bank has relative to its liabilities.  C. The amount of debt a bank has compared to its book value.

Collateralized Debt Obligation
 A.

A structured debt security backed by a portfolio of bonds issued by a variety of corporate or sovereign sellers.  B. A security in which the collateral includes all assets owned by the issuer.  C. A bond that obligates the issuer to insure its collateral.

Credit default swap
 A.

A swap that allows an investor to speculate on an increase or decrease in the company’s profit.  B. A swap that entitles one party to a fixed interest rate and another a floating rate.  C. A tradeable contract in which a party agrees to pay an annual interest rate in exchange for the promise to pay the face value of a bond or loan should the issuer fail to fulfill its payment obligations, or defaults.

London interbank offer rate
 A.

The rate at which London banks trade government bonds.  B. The rate at which banks in London make short-term loans to each other, fixed on a daily basis.  C. The rate London banks use to set foreign currency values.

Short-selling
 A.     Selling

a short term bond and using the money to buy longer term securities.  B.     Borrowing a security, then selling it immediately in expectation of buying it back at a lower price and keeping the difference.  C.     Selling stocks as a short-term investment.

Poison pill
 A.     When

a company’s profit is reduced because it has to pay back loans.  B.     A bond that loses money when stock prices fall.  C.     Provisions with a company’s charter to prevent hostile takeovers by making new shares available to existing owners at a ratio that makes the company unattractive to buyers. 

Question 1

A. Toyota Motor Corp., grappling with excess North American plant capacity as sales wither, plans to spend about $500 million to upgrade an Indiana SUVassembly plant, its biggest single such investment this year. B. As declining sales have caused excess capacity at  North American auto plants, Toyota Motor Corp. plans to spend about $500 million to improve its SUV assembly plant in Indiana, its biggest investment this year. C. Toyota Motor Corp. plans to spend about $500 million this year improving its SUV assembly plant in Indiana as withering sales have left the company with excess capacity.

Question 2
 A.

Rio Tinto Group, the world’s thirdlargest mining company, sold part of its Alcan packaging unit to Bemis Co. for $1.2 billion to cut debt. B. Bemis Co., a part of Rio Tinto Group's Alcan packaging unit, was sold for $1.2 billion to reduce debt. C. To cut debt at Rio Tinto Group, Bemis Co., part of the company's Alcan packaging unit, was sold for $1.2 billion.

Question 3

A. Samsung Electronics Co.  shares climbed the most in more than a month after the company, the world’ second-largest chipmaker, said second-quarter operating profit probably jumped more than fivefold from the preceding quarter. B. Samsung Electronics Co.  shares gained the most in more than a month after the company said profit probably jumped more than five-fold on rising prices for its semiconductors and liquidcrystal displays. C. Samsung Electronics Co.  shares soared after the company said rising prices for computer chips and liquid-crystal displays would boost profit.