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Flashcards in Definitions Deck (77)
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1

International Finance

is concerned with the determination of income, consumption over time, and linking 2 or more international markets.

2

Balance of Payment

statistical statements of all economic transactions between Australian residents and the world over a particular period.

3

FX Market

market in which one currency is bought and sold for another currency.

4

Interbank operations

buying and selling of currencies between banks.

5

Eurocurrency market

market for short term assets and liabilities that are denominated in currencies other than that of the country in which they are held.

6

Eurocurrencies

short term assets and liabilities denominated in currencies other than that of the country where they are issued.

7

Eurobanks

banks dealing in short term assets and liabilities denominated in currencies other than that of the country where they are located.

8

International banking

banks operations with non-residents in both domestic and foreign currency, and residents in foreign currency.

9

Euro Commercial Paper

short-term unsecured promissory note issued in currency other tan that of the country in which it is issued
- maturity: 60-180 days
- bearer instrument
- interest paid on maturity

10

Euro Notes

short term unsecured promissory notes issued in a currency other than that of the country in which it is issued
- maturity: 2-4 years
- bearer instrument
- interest paid semi-annually

11

Bond

fixed interest securities

12

Foreign bond

fixed interest securities that are issued in a foreign market denominated in the currency of the country of issue

13

Euro bond

fixed interest securities that are issued in a foreign market denominated in the currency other than that of the country of issue.

14

Equity market

market in which shares are traded and issued

15

International equity market

primary and secondary markets for international equities

16

Equity

value of the shares issued by a company

17

Euro equity market

market in which euroequity is issued and traded

18

Euroequity

an equity sold to investors in more than one national market other than the country where the company is domiciled

19

American Depository Receipts (ADR)

negotiable certificate issued by a US bank representing a specified number of shares in a foreign stock traded on the US exchange

20

Exchange rate

price of one currency in terms of another

21

Spot rate

exchange rate for immediate delivery

22

Forward rate

agreement you make for delivery at some specific future rate

23

Indirect ER

- S(f/d)
- buy > sell
- increase S = appreciation of domestic

24

Direct ER

- S(d/f)
- sell > buy
- increase S = depreciation of domestic

25

Buy/sell rates

the rates at which the bank buys/sells

26

Buy/sell margin

(spread) difference between buy and sell rates

27

Cross rate

ER between two currencies computed by reference to a third currency

28

Effective exchange rate

measure of the value of one currency in terms of more than one other currency

29

Relative exchange rate

ratio of ER in a particular period to the value of the same ER in a base period
Vt = St/S0

30

Nominal exchange rate

exchange rate to reflect geographical distribution of trade