Practice English Vocabulary Exercises – Vocabulary for Banking and Finance: Currency markets 2

A. Put the words into the spaces below.

black market            hard currency            pegged

stability            transactions            convertible

A soft currency

The Kzarnian florint is not ¹ …………………. outside the Republic of Kzarnia. Until recently, the official exchange rate was KF20 to the US dollar, although the ² …………………. rate was at least double that. However, last month the government ³ …………………. the currency to the dollar at a lower level, and the gap between the official and unofficial rates has narrowed. The official rate currently stands at around KF35. Despite the improved ⁴ …………………. of the currency, most major ⁵ …………………. within the country are still carried out in ⁶ …………………. . Tourists may never even see a Kzarnian florint, as all goods and services they are likely to require can be paid for in euros or US dollars.

B. Look at the article. Are the following sentences true or false?

1   The Kzarnian florint can be bought in any bureau de change that has them in stock. TRUE / FALSE

2   At the moment, the black market rate is only slightly better than the official rate. TRUE / FALSE

3   KZ are mostly used for small everyday transactions. TRUE / FALSE

4   In Kzarnia, you can pay for you hotels, restaurants and taxi drivers in any hard currency. TRUE / FALSE

C. Put the words into the spaces below.

cost of living          denominations          Eurozone

legal tender          monetary unit          rounding up

A hard currency

The euro is the ¹ …………………. of the majority of countries within the European Union. Notes come in ² …………………. of 5, 10, 20, 50, 100 and 500 euros. The currency was introduced on 1st January 2002, and shortly afterwards the national currencies of the countries in the ³ …………………. ceased to be ⁴ …………………. .

One effect of the introduction of the euro was “euro inflation”, with the ⁵ …………………. rising sharply as a result of the ⁶ …………………. of prices.

D. Choose the best words.

1   When the government doesn’t control the exchange rate in any way, the currency is ………………….

      a   freely convertible       

      b   totally convertible       

      c   absolutely convertible

2   The Japanese yen is trading for less than its usual value. You can talk about ………………….

      a   a small yen       

      b   a bad yen       

      c   a weak yen

3   The Mexican peso is trading for more than its usual value. You can talk about ………………….

      a   a big peso       

      b   a good peso       

      c   a strong peso

4   A sovereign is a coin made of 7.3 grams of gold, and is worth a lot of money. However, its …………………. is just one pound.

      a   front value       

      b   face value       

      c   written value

5   Changes in the values of currencies are called ………………….

      a   currency fluctuations       

      b   currency alterations       

      c   currency changes

6   An Internet site which does currency calculations based on the latest exchange rates is called a ………………….

      a   currency changer       

      b   currency converter       

      c   currency setter

7   When you change money, you usually have to pay a ………………….

      a   commission       

      b   percentage       

      c   fee

8   When changing money, banks tend to offer a …………………. exchange rate than bureaus de change.

      a   better       

      b   nicer       

      c   fatter

9   Traders sometimes agree to trade currency in the future for an agreed rate. A “long position” means that the trader will make a profit if the currency ………………….

      a   goes up       

      b   goes down       

      c   stays the same

10   A “short position” means that the trader will make a profit if the currency ………………….

      a   goes up       

      b   goes down       

      c   stays the same

A: 1 convertible, 2 black market, 3 pegged, 4 stability, 5 transactions, 6 hard currency

B: 1 F, 2 T, 3 T, 4 F

C: 1 monetary unit, 2 denominations, 3 Eurozone, 4 legal tender, 5 cost of living, 6 rounding up

D: 1 a, 2 c, 3 c, 4 b, 5 a, 6 b, 7 a, 8 a, 9 a, 10 b

E: 5 and 7 are not possible

1   One euro fifty

2   One-and-half-euros

3   One euro fifty cents

4   One euro and fifty cents

5   One point fifty euros

6   One point five euros

7   A euro with fifty