Large companies need a way to reach the savings of the public at large. The same problem, on a smaller scale, faces practically, every company trying to develop new products and If create new jobs. There can be little prospect of raising the sort of sums needed from friends and people we know, and while banks may agree to provide short-term finance, they are generally unwilling to provide money on a permanent basis for a long-term projects. So companies turn to the public, inviting people to lend them money, or take a share in the business in exchange for a share in future profits.
They do this by issuing stocks and shares in the business through the Stock Exchange.By doing so, they can put into circulation the savings of individuals and institutions, both at home and overseas .
Many of the services needed both by industry and by each of us are provided by the Government or by local authorities. Without hospitals, roads, electricity, telephones, railways,this country could not function. All these require continuous spending on new equipment and new development if they are to serve us properly, requiring more money than is raised through taxes alone. The Government, local authorities, and nationalized industries therefore frequently. need to borrow money to finance major capital spending, and they, too, come to the Stock Ex-change.
There is hardly a man or woman in this country whose standard of living does not depend on the ability of his or her employers to raise money to finance money of his of her employers to finance money to raise of her This new money must come from the savings of the country. The Stock Exchange exists to provide a channel through which these savings can reach those who need finance.
1.Almost all companies involved in new production and development must
[A] depend on the population as a whole for finance
[B] rely on their own financial resources
[C] persuade the banks to provide long-term finance
[D] borrow large sums of money from friends and people they know
2. When the savers want their money back, they
[A] put their shares in the company back on the market
[B] transfer their money to a more successful company
[C] look for other people to borrow money
[D] ask another company to obtain their money for them
3. The money which enables these companies to go ahead with their projects is
[A] repaid to its original owners as soon as possible
[B] invested in different companies on the Stock Exchange
[C] exchanged for part ownership in the Stock Exchange
[D] raised by the selling of shares in the companies
4.All the essential services on which we depend are
[A] unable to provide for the needs of the population
[B] financed wholly by rates and taxes
[C] in constant need of financial support
[D] run by the government or our local authorities
5. The Stock Exchange makes it possible for the government, local authorities and nationalized
[A] to make certain everybody lends money to them
[B] to raise money to finance new development
[C] to make certain everybody saves money