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 guidelines for international trade, including a negotiation of lower international trade barriers, and settling trade disputes. GATT also acts as international arbitrator with respect to trade agreement abrogation. More specifically, GATT has four basic long-run objectives: (1) reduction of tariffs by negotiation, (2) elimination of import quotas (with some exceptions), (3) nondiscrimination in trade through adherence to unconditional most-favored-nation treatment, and (4) resolution of differences through arbitration and consultation.
GILT (OR GILT-EDGED)
A U.K. government bond.
GLOBAL BOND INDEXES
Today, investors do not have to settle for only the U.S. bond market to get fixed-income results. The J.P. Morgan Government Bond Index is considered the most widely-used benchmark for measuring performance and quantifying risk across international fixed income bond markets. The index and its underlying subindexes measure the total, principal, and interest returns in each of 13 countries and can be reported in 19 different currencies. The index limits inclusion to markets and issues that are available to international investors, to provide a more realistic measure of market performance.
Other global bond indexes include:
• J.P. Morgan Emerging Markets Bond Index Plus: Total return index of U.S. dollar and other external currency denominated Brady bonds, loans, Eurobonds, and local market debt instruments traded in emerging markets.
• Salomon Smith Barney World Government Bond Index: Tracks debt issues traded in 14 world government bond markets. Issues included in the Index have fixed-rate coupons and maturities of at least one year.
While finding bond yields is relatively easy, locating bond index results can be trickier. The Wall Street Journal and Barron’s have extensive bond index coverage. And business news cable TV channels such as CNBC and CNNfn also track these indexes. Internet users can check Web sites such as www.bloomberg.com or www.bondsonline.com for bond index results.
GLOBAL FUND
A global fund is a mutual fund that invests globally—in both U.S. and foreign securities. Unlike an international fund, it invests anywhere in the world, including the United States. However, most global funds keep the majority of their assets in foreign markets.
GLOBAL REGISTERED SHARES
Global registered shares are equity shares that are registered and traded in many foreign equity markets. They contrast with American Depository Receipts (ADRs), which are foreign company shares placed in trust with a U.S. bank, which in turn issues depository receipts to U.S. investors. For quotations on global shares, log on to www.adr.com by J.P. Morgan.
GOLD EXCHANGE STANDARD
The Gold Exchange Standard emerged as a result of negotiations at the Bretton Woods Conference in 1944. Under the Agreement, all countries were to fix the value of their currencies in terms of gold but were not required to exchange their currencies for gold. Only the U.S. dollar remained convertible into gold at $35 per ounce. All participating countries agreed to maintain the value of their currencies within 1% of par by buying or selling foreign exchange or gold as needed. But if a currency became weak, a devaluation of up to 10% would be allowed. Larger devaluations required the IMF’s approval.
GOLD STANDARD
The Gold Standard is the setting by most major countries of fixed values for their currencies in relation to gold. A country’s currency is expressed on its equivalent value to gold such as one U.S. dollar equating to 23.22 grains of fine gold. It displays how much of the units of a currency are exchangeable into a certain amount of gold. If a significant outflow of gold occurs, a deficit in the balance of payments may arise. A gold standard may aid stability in exchange rates. It is a system in which currencies are defined in terms of their gold content and payment imbalances between countries are settled in gold.
GUILDER
Monetary unit of the Netherlands, Antilles, and Surinam. GULF RIYAL
Monetary unit of Dubai and Qatar.
