Document Sample
Foreign Powered By Docstoc
					                    Financial Terms related to Foreign

 This document is part of the valuable contents
   available at, a free online
glossary with more than five thousand financial
               and business terms.

  This document can be copied and distributed freely

                                                                                              Find thousands of financial terms at
  respecting its original format. It is forbidden its
  transcription, translation or change on its format
     without authorization of its author or editor.

Controlled foreign corporation

   • Abbreviated CFC. A foreign corporation whose voting stock is more than 50%
   owned by U.S. stockholders, each of whom owns at least 10% of the voting power.

Currencies and major foreign market hedge funds

   • Invest in securities and derivatives which go across borders. These funds try to
   capitalize on interest rate differentials between currencies, varying investment
   climates for different countries, relative volatilities in equity or credit markets, and
   variations of the other hedge fund themes.


   • A non U.S. company with securities trading on The NASDAQ Stock Market.

Foreign affiliate

   • A foreign corporation in which the MNC owns at least 10 percent of the common
   shares.                     2|Page

Foreign banking market

   • That portion of domestic bank loans supplied to foreigners for use abroad.

Foreign bond

   • A bond issued by a nondomestic borrower in the domestic capital market.

   • A bond issued in a host country's financial market, in the host country's currency,
   by a foreign borrower. An international bond that is sold primarily in the country of
   the currency of the issue.

                                                                                           Find thousands of financial terms at
   • A bond issued on the domestic capital market of anther company.

Foreign bond market

   • That portion of the domestic bond market that represents issues floated by foreign
   companies to governments.

Foreign currency

   • Foreign money.

Foreign currency effects

   • Returns on foreign investments will increase (in terms of dollars) to the extent a
   foreign currency appreciates relative to the dollar. The opposite would be true for
   declining foreign currencies.

Foreign currency option

   • An option that conveys the right to buy or sell a specified amount of foreign
   currency at a specified price within a specified time period.

Foreign currency translation

   • The process of restating foreign currency accounts of subsidiaries into the
   reporting currency of the parent company in order to prepare consolidated financial
   statements.                     3|Page

Foreign direct investment

   • FDI. The acquisition abroad of physical assets such as plant and equipment, with
   operating control residing in the parent corporation.

   • Abbreviated FDI. The transfer by a multinational firm of capital, managerial, and
   technical assets from its home country to a host country.

Foreign equity market

   • That portion of the domestic equity market that represents issues floated by foreign

                                                                                              Find thousands of financial terms at

Foreign exchange

   • Currency from another country.

   • Refers to currencies other than the United States dollar. It also refers to
   transactions, activities, and operations for trading, hedging, and investing in multiple

Foreign exchange controls

   • Various forms of controls imposed by a government on the purchase/sale of foreign
   currencies by residents or on the purchase/sale of local currency by nonresidents.

Foreign exchange dealer

   • A firm or individual that buys foreign exchange from one party and then sells it to
   another party. The dealer makes the difference between the buying and selling
   prices, or spread.

Foreign exchange fx risk

   • The risk that a long or short position in a foreign currency might, due to an adverse
   movement in the relevant exchange rate, have to be closed out at a loss. The long
   or short position may arise out of a financial or commercial transaction.

Foreign exchange manager                     4|Page

   • The manager responsible for monitoring and managing the firm's exposure to loss
   from currency fluctuations.

Foreign exchange rate

   • The value of two currencies with respect to each other.

   • The price at which one currency trades for another.

Foreign exchange risk

   • This refers to the possibility of losing money due to changes in exchange rates. Net

                                                                                            Find thousands of financial terms at
   Foreign Exchange Exposure will create a FX risk even if the bank is perfectly
   hedged with respect to duration, credit risk, etc.

   • The risk that a long or short position in a foreign currency might have to be closed
   out at a loss due to an adverse movement in the currency rates.

Foreign exchange swap

   • An agreement to exchange stipulated amounts of one currency for another
   currency at one or more future dates.

Foreign market

   • Part of a nation's internal market, representing the mechanisms for issuing and
   trading securities of entities domiciled outside that nation. Compare external market
   and domestic market.

Foreign market beta

   • A measure of foreign market risk that is derived from the capital asset pricing

Foreign sales corporation

   • FSC. A special type of corporation created by the Tax Reform Act of 1984 that is
   designed to provide a tax incentive for exporting U.S.-produced goods.                       5|Page

Foreign subsidiary

   • An incorporated business established by an MNC that is completely separate from
   the parent.

Foreign tax credit

   • Home country credit against domestic income tax for foreign taxes paid on foreign
   derived earnings.

Integrated foreign subsidiary

                                                                                         Find thousands of financial terms at
   • An operation that is financially or operationally interdependent with the parent

Self sustaining foreign subsidiary

   • An operation that is financially and operationally independent of the parent

Shared By: