Module 11 Vocabulary Flashcards
Amount owed to someone
Debt
Value of the shares of a company
Equity
A useful or valuable thing; something you own such as building, inventory, or cash
Assets
Any form of money in circulation in a different country
Foreign currency
The price of one currency expressed in terms of units of another currency
Exchange rates
A type of high-risk investing
Venture capital
Enlisting the help of a large number of people, often via the internet
Crowdsourcing
A collection of generally accepted accounting principles used in the United States
GAAP
An independent group that oversees the development and revision of the IFRS
International Accounting Standards Board
A collection of accounting principles used through much of the world outside the United States.
International Financial Reporting Standards
An independent group that oversees the development and revision of the GAAP
Financial Accounting Standards Board
Possible political changes or instability in a country that could hurt a company’s financial return on a foreign investment.
Political risk
The market in which people use one currency to buy another currency
Foreign Exchanges Market
Using financial instruments to reduce adverse price movements
Hedging
Special types of financial instruments, the prices of which are ultimately derived from the price or performance of some underlying assets.
Derivatives
A measure of the variation in returns on an investment
Return volatility
A contract in which the firm agrees to pay a set rate at the beginning of a contract.
Forward contract
Contracts that require the exchange of a specific amount of currency at a specific future date and at a specific exchange rate
Currency futures contracts
A contract where 2 firms agree to swap currencies in the future at a previously agreed exchange rate.
Currency swap contracts
The option or the right to exchange a specific amount of currency on a specific future date and at a specific agreed-on rate
Currency option contracts
The practice of shifting assets to a subsidiary in a country with a better tax bracket
Transfer pricing
A loan made between a parent company and its subsidiary through a financial intermediary such as a bank
Fronting loan
A country that has very low corporate taxes
Tax Haven
