E-LEARNING AND NEW ECONOMY

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E-LEARNING  AND NEW ECONOMY

Also known as Stock Market, it is a market where securities (a general term for shares and bonds) are bought and sold that is, a place where companies can raise capital for investment and people can invest their savings either to get an income or to make capital gains (that is, make money by selling shares). There are Stock Exchanges in many major cities including New York, Tokyo, Hong Kong, Paris, Milan, London as well as in other important centres. Among the biggest and most famous are Wall Street (New York Stock Exchange) and the International Stock Exchange in London.

• Securities include:

Government stocks and bonds - they are issued by the government to finance government projects. They are backed by government resources, therefore they are considered a safe form of investment. They are issued for a fixed period of time and have a fixed rate of interest known in advance.

Local authority bonds - they are issued by local authorities; they have a fixed rate of interest and a fixed date of repayment; they are considered safe as they are backed by local authorities.

Debentures - they are a form of a loan to a company. They have a fixed rate of interest which must be paid even if the company does not make a profit and are redeemable at a fixed date or before. They are secured by a mortgage on all or specified assets of the company (that is, the person who has lent the money to the company has legal right to take possession of these assets if the money is not repaid). Debenture holders are creditors of the company and have no involvement in its management.

Shares - they represent a part of the company's capital. The shareholders are the owners of the company: if they have ordinary shares they have voting rights at the Company's General Annual Meeting, if they have preference shares they have no voting rights. Preference shareholders, however, have a priority call on the distribution of profits of the company, after debenture holders but before ordinary shareholders. Preference shares usually pay a fixed rate of dividend (a percentage of the nominal value of the share) while ordinary shares pay a dividend which is determined each year by the Board of Directors and depends on the profitability of the company.

«Blue chips» are the most highly-regarded shares, considered to be a rather safe investment because they are the shares of the companies with the highest capital in the country.