CHAPTER 9
CHAPTER 9
CHAPTER 9
CHAPTER 9
Potpourri
100
System that allows financial resources in the form of debt and equity according to their most efficient uses.
What is Capital Market?
100
Market consisting of all the world’s currencies that are banked outside their countries of origin.
What is Eurocurrency market?
100
Intentionally lowering the value of a nation’s currency.
What is Devaluation?
100
Technique that uses charts of past trends in currency prices and other factors to forecast exchange rates.
What is Technical analysis?
100
Collection of agreements and institutions that govern exchange rates.
What is International monetary system?
200
Loan in which the borrower promises to repay the borrowed amount (the principal) plus a predetermined rate of interest.
What is Debt?
200
Exchange rate calculated using two other exchange rates.
What is Cross Rate?
200
Principle that an identical item must have an identical price in all countries when the price is expressed in a common currency.
What is Law of one Price?
200
Principle that the nominal interest rate is the sum of the real interest rate and the expected rate of inflation over a specific period.
What is Fisher effect?
200
Debt instrument that specifies the timing of principal and interest payments.
What is a Bond?
300
Market consisting of all stocks bought and sold outside the issuer’s home country.
What is the International Equity Market?
300
Currency used as an intermediary to convert funds between two other currencies.
What is Vehicle currency?
300
Intentionally raising the value of a nation’s currency.
What is Revaluation?
300
IMF asset whose value is based on a “weight basket” of four currencies.
What is Special drawing right?
300
Shares of ownership in a company’s assets that give shareholders a claim on the company’s future cash flows.
What is a Stock?
400
Interest rates that the world’s largest banks charge one another for loans.
What is Interbank interest rates?
400
Part ownership of a company in which the equity holder participates with other part owners in the company’s financial gains and losses.
What is Equity?
400
International monetary system in which nations linked the value of their paper currencies to specific values of gold.
What is Gold standard?
400
View that prices of financial instruments do not reflect all publicly available information.
What is Inefficient market view?
400
View that prices of financial instruments reflect all publicly available information at any given time.
What is Efficient market view.?
500
Bond sold outside the borrower’s country and denominated in the currency of the country in which it is sold.
What is Foreign bond?
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