Finance and Banking

ABSOLUTE RATE To AUTOMATIC ADJUSTMENT MECHANISM (Finance and Banking)

ABSOLUTE RATE An interest rate that is determined without reference to an index or funding base such as LIBOR or U.S. treasury rates. For example, rather than LIBOR + 0.75%, the bid is expressed as 10.375%. ACCOUNTING FOR MULTINATIONAL OPERATIONS At the beginning of the 21st century, the world economy has become truly internationalized and […]

BACK-TO-BACK FINANCING To BURN RATE (Finance and Banking)

BACK-TO-BACK FINANCING An intercompany loan arranged through a bank. BACK-TO-BACK LETTER OF CREDIT Back-to-back letter of credit is one type of letter of credit (L/C). It is a form of pretrade financing in which the exporter employs the importer’s L/C as a means for securing credit from a bank, which in turn supports its L/C […]

CABLE To CURRENT RATE METHOD (Finance and Banking)

Cable is the U.S. dollar per British pound cross rate. CALL MONEY 1. Money lent by banks to brokers on demand (payable at call). 2. Also called demand money or day-to-day money, interest-bearing deposits payable upon demand. An example is Eurodeposits. CANADIAN VENTURE EXCHANGE Canadian Venture Exchange (CDNX) is a product of the merger of […]

DEBENTURE To DUAL CURRENCY BOND (Finance and Banking)

A long-term debt instrument that is not collateralized. Because it is unsecured debt, it is issued usually by large, financially strong companies with excellent bond ratings. DEBT SWAP Also called a debt-equity swap, a debt swap is a set of transactions in which an MNC buys a country’s dollar bank debt at a discount and […]

EAFE (EUROPE, AUSTRALIA, FAR EAST) To EXTRACTIVE FDI INDEX (Finance and Banking)

EAFE (EUROPE, AUSTRALIA, FAR EAST) INDEX More exactly known as the Morgan Stanley Capital International Europe, Australia, Far East Index, the EAFE Index reflects the performance of all major stock markets outside North America. It is a market-weighted index composed on 1,041 companies representing the stock markets of Europe, New Zealand, and the Far East. […]

GAMMA To GUILDER (Finance and Banking)

GAMMA Gamma is a measure of the sensitivity of an option’s delta to small changes in the price of the underlying security (or foreign exchange). GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) An agreement signed at the Geneva Conference in 1947 which became effective on January 1, 1948. It set a framework of policies and […]

FACTOR To FUTURES OPTIONS(Finance and Banking)

FACTOR 1. The basis on which a shipping charge is based such as a rate per mile the cargo is transported. 2. A firm that buys accounts receivable from exporters using short-term maturities of no longer than a year and then assumes responsibility for collecting the receivables. This usually involves no recourse, which means the […]

HARD CURRENCY To HYBRID FOREIGN CURRENCY OPTIONS (Finance and Banking)

HARD CURRENCY Often referred to as convertible currency, hard currency is the currency of a country that is widely accepted in the world and may be exchanged for that of another nation without restriction. Hard currency nations typically have sizeable surpluses in their balance of payments and foreign exchange reserves. The U.S. dollar and British […]

IMPORT AND EXPORT PRICE INDEXES To ISSUING BANK (Finance and Banking)

IMPORT AND EXPORT PRICE INDEXES The import and export price indexes measure price changes in agricultural, mineral, and manufactured products for goods bought from and sold to foreigners. They represent increases and decreases in prices of internationally traded goods due to changes in the value of the dollar and changes in the markets for the […]

LABEL OF CONSUMER CONFIDENCE To LONG-TERM NATIONAL FINANCIAL MARKETS (Finance and Banking)

LABEL OF CONSUMER CONFIDENCE This label was displayed in shop windows and in advertising during the transition period for the euro between January 1, 1999 and January 1, 2001, to inform customers that the prices of the products or services are displayed in both euro and national currency units. LAG As a means of hedging […]

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