Thẻ ghi nhớ: [ESP233] Unit 3: Interest Rate | Quizlet

An interest rate

the cost of borrowing money or the compensation for the service and risk of lending money

Nominal interest rate

is the amount, in money terms, of interest payable

Real interest rate

measures the purchasing power of interest receipts, is calculated by adjusting the nominal rate charged to take inflation into account

Inflation

Inflation will also affect interest rate levels. The higher the rate of inflation, the more interest rates are likely to rise

Coupon rate

the yield paid by a fixed income security; is the yield the bond paid on its issue date. This yield, however, will change as the value of the bond changes, thus giving the bond's yield to maturity

The Yield to maturity

the interest rate that equates the present value of future payments of a debt instrument with the instrument's value today

The return on a security

which tells you how well you have done by holding the security over a stated period of time, can differ substantially from the interest rate as measured by the yield to maturity

A variable rate (variable interest rate)

the amount charged to a borrower for a variable-rate loan, such as mortgage, usually expressed as an annual percentage and fluctuates in tandem with a rate index

A fixed rate

an interest rate that stays the same for the life of a loan, or for a portion of the loan term, depending on the loan agreement

Capital gain

an increase in a capital asset's value and is considered to be realized when the asset is sold, may be short-term or long-term and must be claimed on income taxes

A dividend

the distribution of some of a company's earnings to a class of its shareholders, as determined by the company's board of directors; payments made by publicly-listed companies as a reward to investors for putting their money into the venture

mortgage

a loan to buy a house or property

default

not pay back a loan

funds

money

variable

changes over time

fixed

stays the same over time

co-sign

guarantee a loan for somebody else

cash advance

Money that you borrow on a credit card

credit rating

a check to see how well you can payback a loan

credit evaluation

an opinion on how well you can pay back a loan

credit limit

the maximum you can borrow

annual

yearly

savings

a bank account you use to save money

chequing

A bank account you use for day-to-day expenditures

afford

be able to pay for goods or pa back a loan

interest

the cost of borrowing money

net income

your income after you pay income taxes and expenses

gross income

your income before you pay taxes

prime

the basic interest rate that banks use

purchase

Credit cards are a convenient way to (1)__________ goods.

funds

They also come in handy when you have a shortage of -----_________

Cash advance

If you need a little extra money for the weekend, you can take out a ----

debt

In spite of these benefits, credit card ----- can also cause serious problems for people.

afford

People spend more than they can -----

interest

Also, because of the high ---- on money borrowed

Pay back

the credit card debt becomes harder and harder to -----

default

Eventually, some people are forced to ----- on their payments.

limit

This is why credit card companies put a ---- on the amount that people can borrow

savings

Most people don't have enough in ----- to purchase a house

mortgage

so they take out a house loan, which is called a -----

credit evaluation

Before you get a mortgage, the bank will do a thorough ---- to make sure you can afford the loan.

afford

Before you get a mortgage, the bank will do a thorough credit evaluation to make sure you can ---- the loan.

credit risk

If the bank feels you are a ----- they may ask you to find somebody else to (6) your mortgage

co-sign

If the bank feels you are a credit risk they may ask you to find somebody else to ----- your mortgage

default

This person will be responsible to pay your mortgage if you ----

repayment mortgage

you pay the capital sum and the interest

interest-only mortgage

you pay the interest in installments, and you pay the capital sum by another method

endowment mortgage

an interest-only mortgage, with the capital repaid by an endowment

offset mortgage

Your current and mortgage accounts are combined to reduce the interest

fixed-rate mortgage

the mortgage interest rate stays the same

base-rate tracker mortgage

the mortgage interest rate is linked to the interest rate of country's central bank

Variable Rate Mortgage

the mortgage lender can change the interest rate as they wish

capped mortgage

the mortgage interest rate can only rise as far as a certain level

Strong growth

steady economic expansion

Above target

higher than desired

Premature

too soon

Ward out

avoid

unfolding

occurring

a discount bond

is bought at a price below its face value, and the face value is repaid at the maturity date.

a coupon bond

pays the owner of the bond a fixed interest payment every year until the maturity date, when a specified final amount is repaid

the yield to maturity

is what economists mean when they use the term interest rate

discount bonds

make payment only at their maturity dates

coupon bonds

have payments periodically until maturity

Joe took out a ---- so that he could buy a car

Loan

The car cost 10.000 and the bank agreed to ---- him 8.000

Lend

About a year later, Joe lost his job and started to worry about this ----

Debt

How could he ---- it with no salary coming in?

Repay

Out of the 8.000 that he had originally ---, he still owe more than 5.000

Borrow

Out of the 8.000 that he had originally borrow he still --- more than 5.000

owe

He --- 8% on his account

Earn interest

She wanted to start her own business, so she asked the bank to ----

Set up a loan facility

She lost her job and with no regular income it was difficult to ----

Pay off interest

He was an accountant, so it was not surprising that he was good at ---

Run his finances

Pay into

Đặt tiền đặt cọc

Pay off

pay

1. the City (paragraph 1)

a. the people of London

b. financial professionals working in London

b

2. a quarter-point rise (paragraph 2)

a. a 0.25% rise

b. a 2.5% rise

a

3. consumer spending (paragraph 3)

a. money spent by businesses

b. money spent by ordinary people

b

4. a pick-up in investments (paragraph 3)

a. an increase in share prices

b. a drop in share prices

a

5. in the medium term (paragraph 4)

a. over the next few months

b. over the next few years

b

6. a pre-emptive strike (paragraph 7)

a. an action taken before it becomes necessary

b. an action taken after it becomes necessary

a

12. The move was condemned by industry means businesspeople thought the action was ____________

a. a good thing

b. a bad thing

c. neither good nor bad

b

13. Most banks passed on the 0.25% rise in full means that most banks increased their lending rates by...

a. less than 0.25%

b. 0.25%

c. more than 0.25%

b

14. Base-rate tracker mortgages are ____________ the Bank of England's interest rate.

a. lower than

b. the same as

c. linked to

c

15. I'll need to find an extra £40 a month means that I'll have to ____________ another £40 a month.

a. pay

b. earn

c. save

a

16. A further tightening of policy is another ____________

a. review of targets

b. policy reversal

c. unpopular implementation of policy

c

17. £17bn was wiped off the value of the London stock market means that

a. fewer shares were traded in the UK

b. UK share prices mostly went down

c. a lot of UK companies went bankrupt

b