Acronyms
GAAP
What is Generally Accepted Accounting Principles?
The institutional arrangements that countries adopt to govern exchange rates.
What is the International Monetary System?
The exchange rate transacted at a particular moment by the buyer and seller of a currency.
What is the Spot rate?
Focuses on the day-to-day flow of money in and out of a company.
What is Accounting?
The management of assets and liabilities and the planning of future growth
What is Finance?
FASB
What is The Financial Accounting Standards Board?
The value of the currency is determined by market forces but managed by the government.
What is a Managed Float or "Dirty Float" system?
The exchange rate at which a buyer and a seller agree to transact a currency at some date in the future.
What is Forward exchange rate?
The price one subsidiary charges another for a product or service supplied.
What is transfer price?
Risks that arise from decisions that foreign governments make, including changes in government that result from wars and coups.
What is Political Risk?
FDIC
What is the Federal Deposit Insurance Corporation?
What is the Bretton Woods Agreement?
The option or the right—but not the obligation—to exchange a specific amount of currency on a specific future date and at a specific agreed-on rate.
What are Currency options?
Raising capital by borrowing the money and agreeing to repay the entire amount plus agreed-on interest at a specific date in the future.
What is debt financing?
Subsidiaries or regions make financing or investment decisions for their region, taking advantage of local knowledge and moving quickly to respond to opportunities or uncertainties.
What is a Decentralized "financial organizational" Structure?
BIS
What is the Bank for International Settlements?
Established to finance the reconstruction of the war-ravaged economies of Western Europe after World War II.
What is the World Bank?
A type of equity security that gives the holder an ownership of a company’s assets and earnings.
What are stocks?
Stocks or bonds? Wide range of debt- and equity-based financial instruments.
What are securities?
Prohibits the practice of certain financial practices, such as charging interest.
What is Sharia (Islamic law)?
FOREX
Who is the Foreign Exchange Market?
A currency that countries and institutions hold as part of their foreign exchange reserves. Used to stabilize their local currencies.
What is a Reserve Currency?
Pass through economies, havens with no corporate, income, estate, inheritance, gift, or capital gains tax.
What are Offshore Financial Centers/
Practice used to communicate the organization’s financial position to company managers, investors, banks, and the government.
What is Accounting?
Raising capital by selling shares of stock or ownership.
What is Equity financing?