Practice the vocabulary used in banking and financial services with this exercise. Understanding these terms will help you read financial news and communicate confidently in finance-related discussions.
READY TO PRACTICE? LET’S GO!
Choose the correct response to complete each sentence.
1. Your _________________ rate determines the repayments you make on the money you borrow from a bank.
Correct answer: interest.
2. The money you borrow from a bank is called a _________________.
Correct answer: loan.
3. I have to _________________ another loan.
Correct answer: take out.
4. If you'd like to buy a house, you will probably have to take out a _________________.
Correct answer: mortgage.
5. A _________________ mortgage ensures that your interest rate will not change.
Correct answer: fixed rate.
6. Your home may be _________________ if you don't keep up repayments on your mortgage.
Correct answer: repossessed.
7. Most banks have two types of personal accounts - checking and _________________.
Correct answer: savings.
8. You can ____________________ paying account fees by maintaining the required minimum daily balance.
Correct answer: avoid.
9. What is the ____________________ in my account? It is $450.
Correct answer: balance.
10. Higher account balances usually earn higher interest ____________________.
Correct answer: rates.
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💵 Did you know? Finance edition "In the red" and "in the black" come from the traditional practice of writing losses in red ink and profits in black ink in account books. "We finished the quarter in the black" means profitable; "in the red" means operating at a loss. Both expressions are widely used in everyday business English. The word "leverage" in finance means using borrowed money to increase potential returns. Outside finance, it's used as a verb in business meetings everywhere: "We can leverage our existing relationships to enter the new market." It's one of the most overused words in corporate English. "Hedge" in finance means reducing risk by taking an offsetting position. In everyday English it survives in "hedging your bets" — covering multiple options to avoid total loss. The connection to financial hedging is direct.