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Dual-currency issues

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Definition of Dual-currency issues

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Dual-currency issues

Eurobonds that pay coupon interest in one currency but pay the principal in a different
currency.



Related Terms:

Asian currency units (ACUs)

Dollar deposits held in Singapore or other Asian centers.


Bellwether issues

Related:Benchmark issues.


Benchmark issues

Also called on-the-run or current coupon issues or bellwether issues. In the secondary
market, it's the most recently auctioned Treasury issues for each maturity.


Blocked currency

A currency that is not freely convertible to other currencies due to exchange controls.


Currency

Money.



Currency arbitrage

Taking advantage of divergences in exchange rates in different money markets by
buying a currency in one market and selling it in another market.


Currency basket

The value of a portfolio of specific amounts of individual currencies, used as the basis for
setting the market value of another currency. It is also referred to as a currency cocktail.


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Currency future

A financial future contract for the delivery of a specified foreign currency.


Currency option

An option to buy or sell a foreign currency.


Currency risk

Related: Exchange rate risk


Currency risk sharing

An agreement by the parties to a transaction to share the currency risk associated with
the transaction. The arrangement involves a customized hedge contract embedded in the underlying
transaction.


Currency selection

Asset allocation in which the investor chooses among investments denominated in
different currencies.


Currency swap

An agreement to swap a series of specified payment obligations denominated in one currency
for a series of specified payment obligations denominated in a different currency.


Current-coupon issues

Related: Benchmark issues


Devaluation A decrease in the spot price of the currency



dual pricing arrangement

a transfer pricing system that allows
a selling division to record the transfer of goods or
services at one price (e.g., a market or negotiated market
price) and a buying division to record the transfer at another
price (e.g., a cost-based amount)


Dual-currency Issues Image 3

Dual syndicate equity offering

An international equity placement where the offering is split into two
tranches - domestic and foreign - and each tranche is handled by a separate lead manager.


Emerging Issues Task Force (EITF)

A special committee of the Financial Accounting Standards Board established to reach consensus of how to account for new and unusual financial transactions that have the potential for creating differing financial reporting practices.



Emerging Issues Task Force (EITF)

A separate committee within the Financial Accounting Standards Board composed of 13 members representing CPA firms and preparers of financial statements
whose purpose is to reach a consensus on how to account for new and unusual financial transactions
that have the potential for creating differing financial reporting practices.


Eurocurrency deposit

A short-term fixed rate time deposit denominated in a currency other than the local
currency (i.e. US$ deposited in a London bank).


Eurocurrency market

The money market for borrowing and lending currencies that are held in the form of
deposits in banks located outside the countries of the currencies issued as legal tender.


Euroequity issues

Securities sold in the Euromarket. That is, securities initially sold to investors
simultaneously in several national markets by an international syndicate. Euromarket.
Related: external market


European Currency Unit (ECU)

An index of foreign exchange consisting of about 10 European currencies,
originally devised in 1979.


Foreign currency

Foreign money.


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.


Gradualism

A policy of decreasing the rate of growth of the money supply gradually over an extended period of time, so that inflation can adjust with smaller unemployment cost. Contrast with cold-turkey policy.


Hard currency

A freely convertible currency that is not expected to depreciate in value in the foreseeable future.



Individual Insurance

Insurance that is offered to individuals rather than groups.


Individual Retirement Account

A personal savings account into which a defined
maximum amount may be contributed, and for which any resulting interest
is tax deferred.


Individual Retirement Annuity

An IRA comprised of an annuity that is managed
through and paid out by a life insurance company.


Multicurrency clause

Such a clause on a Euro loan permits the borrower to switch from one currency to
another currency on a rollover date.


Multicurrency loans

Give the borrower the possibility of drawing a loan in different currencies.


New-issues market

The market in which a new issue of securities is first sold to investors.


Reporting currency

The currency in which the parent firm prepares its own financial statements; that is, U.S.
dollars for a U.S. company.


Reserve currency

A foreign currency held by a central bank or monetary authority for the purposes of
exchange intervention and the settlement of inter-governmental claims.


Reserve Currency

A currency, frequently the U.S. dollar, that is used by other countries to denominate the assets they hold as international reserves.


Residual assets

Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.


Residual claim

Related: equity claim


Residual dividend approach

An approach that suggests that a firm pay dividends if and only if acceptable
investment opportunities for those funds are currently unavailable.


residual income

the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center


residual income

Also called economic value added. Profit minus cost of capital employed.


Residual income (RI)

The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.


Residual losses

Lost wealth of the shareholders due to divergent behavior of the managers.


Residual method

A method of allocating the purchase price for the acquisition of another firm among the
acquired assets.


Residual risk

Related: unsystematic risk


Residual value

Usually refers to the value of a lessor's property at the time the lease expires.


Residual Value

The value attributed to a company to represent all future cash flows
after the end of the forecast period


Residual Value

Typically estimated based on the present value of the after-tax cash flows expected to be earned after the forecast period.


Residuals

1) Parts of stock returns not explained by the explanatory variable (the market-index return). They
measure the impact of firm-specific events during a particular period.
2) Remainder cash flows generated by pool collateral and those needed to fund bonds supported by the collateral.


Retail investors, individual investors

Small investors who commit capital for their personal account.


Small issues exemption

Securities issues that involve less than $1.5 million are not required to file a
registration statement with the SEC. Instead, they are governed by Regulation A, for which only a brief
offering statement is needed.


Soft currency

A currency that is expected to drop in value relative to other currencies.


Specific issues market

The market in which dealers reverse in securities they wish to short.


Virtual currency option

A new option contract introduced by the PHLX in 1994 that is settled in US$ rather
than in the underlying currency. These options are also called 3-Ds (dollar denominated delivery).



 

 

 

 

 

 

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