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Financial Terms | |
Exchange |
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Definition of ExchangeExchangeThe marketplace in which shares, options and futures on stocks, bonds, commodities and indices
Related Terms:American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades Bill of exchangeGeneral term for a document demanding payment. Chicago Mercantile Exchange (CME)A not-for-profit corporation owned by its members. Its primary Commodities Exchange Center (CEC)The location of five New York futures exchanges: Commodity Convertible exchangeable preferred stockConvertible preferred stock that may be exchanged, at the Effective Exchange RateThe weighted average of several exchange rates, where the weights are determined by the extent of our trade done with each country. Equation of ExchangeThe quantity theory equation Mv = PQ. ![]() Exchange controlsGovernmental restrictions on the purchase of foreign currencies by domestic citizens or Exchange of assetsAcquisition of another company by purchase of its assets in exchange for cash or stock. Exchange of stockAcquisition of another company by purchase of its stock in exchange for cash or shares. Exchange offerAn offer by the firm to give one security, such as a bond or preferred stock, in exchange for Exchange rateThe price of one country's currency expressed in another country's currency. exchange rateAmount of one currency needed to purchase one unit of another. Exchange Rate Mechanism (ERM)The methodology by which members of the EMS maintain their Exchange Rate, NominalThe price of one currency in terms of another, in this book defined as number of units of foreign currency per dollar. Exchange Rate, RealThe nominal exchange rate corrected for price level differences. ![]() Exchange rate riskAlso called currency risk, the risk of an investment's value changing because of currency Exchange riskThe variability of a firm's value that results from unexpected exchange rate changes or the Exchangeable SecuritySecurity that grants the security holder the right to exchange the security for the expectations theory of exchange ratesTheory that expected spot exchange rate equals the forward rate. Fixed-exchange rateA country's decision to tie the value of its currency to another country's currency, gold Fixed Exchange RateAn exchange rate held constant by a government promise to buy or sell dollars at the fixed rate on the foreign exchange market. Flexible Exchange RateAn exchange rate whose value is determined by the forces of supply and demand on the foreign exchange market. Floating exchange rateA country's decision to allow its currency value to freely change. The currency is not Floating Exchange RateSee flexible exchange rate. Foreign exchangeCurrency from another country. Foreign ExchangeThe currency of a foreign country. ![]() Foreign exchange controlsVarious forms of controls imposed by a government on the purchase/sale of Foreign exchange dealerA firm or individual that buys foreign exchange from one party and then sells it to Foreign Exchange MarketA worldwide market in which one country's currency is bought or sold in exchange for another country's currency. Foreign Exchange ReservesA fund containing the central bank's holdings of foreign currency or claims thereon. Foreign exchange riskThe risk that a long or short position in a foreign currency might have to be closed out Foreign exchange swapAn agreement to exchange stipulated amounts of one currency for another currency Forward Exchange MarketA market in which foreign exchange can be bought or sold for delivery (and payment) at some specified future date but at a price agreed upon now. Forward exchange rateexchange rate fixed today for exchanging currency at some future date. forward rate of exchangeexchange rate for a forward transaction. Gold exchange standardA system of fixing exchange rates adopted in the Bretton Woods agreement. It Historical exchange rateAn accounting term that refers to the exchange rate in effect when an asset or London International Financial Futures Exchange (LIFFE)A London exchange where Eurodollar futures London International Financial Futures Exchange (LIFFE)London exchange where Eurodollar futures as well as futures-style options are traded. Medium of ExchangeAny item that can be commonly exchanged for goods and services. New York Stock Exchange (NYSE)Also known as the Big Board or The Exhange. More than 2,00 common Nominal exchange rateThe actual foreign exchange quotation in contrast to the real exchange rate that has Organized exchangeA securities marketplace wherein purchasers and sellers regularly gather to trade Philadelphia Stock Exchange (PHLX)A securities exchange where American and European foreign Real Exchange Rateexchange rate adjusted for relative price levels. Real exchange ratesexchange rates that have been adjusted for the inflation differential between two countries. Realizable Revenue A revenue transaction where assets received in exchange for goods andservices are readily convertible into known amounts of cash or claims to cash. Securities and Exchange Commission (SEC)The federal agency that Securities and Exchange Commission (SEC)Federal agency responsible for regulation of securities markets in the United Securities and Exchange Commission (SEC)A federal agency that administers securities legislation, Securities & Exchange CommissionThe SEC is a federal agency that regulates the U.S.financial markets. SIMEX (Singapore International Monetary Exchange)A leading futures and options exchange in Singapore. Spot exchange ratesexchange rate on currency for immediate delivery. Related: forward exchange rate. spot rate of exchangeexchange rate for an immediate transaction. Stock exchangesFormal organizations, approved and regulated by the Securities and exchange Commission The ExchangeA nickname for the New York stock exchange. Also known as the Big Board. More than Abusive Earnings ManagementA characterization used by the Securities and exchange Accounting exposureThe change in the value of a firm's foreign currency denominated accounts due to a Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' American-style optionAn option contract that can be exercised at any time between the date of purchase and Annual ReportThe report required by the Stock exchange for all listed companies, containing the company’s financial statements. AssetAny possession that has value in an exchange. assetAnything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.). Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Auction marketsMarkets in which the prevailing price is determined through the free interaction of Balance of PaymentsThe difference between the demand for and supply of a country's currency on the foreign exchange market. Bankers AcceptancesA bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. Upon acceptance, the bill becomes, in effect, a postdated certified cheque. BarterA system of exchange in which one good is traded directly for another without the use of money. Basket optionsPackages that involve the exchange of more than two currencies against a base currency at Big BangThe term applied to the liberalization in 1986 of the London Stock exchange in which trading was Big BoardA nickname for the New York Stock exchange. Also known as The exchange. More than 2,000 Block tradeA large trading order, defined on the New York Stock exchange as an order that consists of Blocked currencyA currency that is not freely convertible to other currencies due to exchange controls. Bretton WoodsSite of a 1944 international monetary conference at which the postwar fixed exchange rate system was structured and the International Monetary Fund (IMF) and World Bank were created. Bretton Woods AgreementAn agreement signed by the original United Nations members in 1944 that BrokerAn individual who is paid a commission for executing customer orders. Either a floor broker who Cableexchange rate between British pounds sterling and the U.S.$. Capital marketThe market in which investors buy and sell shares of companies, normally associated with a Stock exchange. capital stockOwnership shares issued by a business corporation. A business Cash transactionA transaction where exchange is immediate, as contrasted to a forward contract, which CBOEChicago Board Options exchange. A securities exchange created in the early 1970s for the public CFTCThe Commodity Futures Trading Commission is the federal agency created by Congress to regulate Clean FloatA flexible exchange rate system in which the government does not intervene. Clearing house / ClearinghouseAn adjunct to a futures exchange through which transactions executed its floor are settled by a Clearing memberA member firm of a clearing house. Each clearing member must also be a member of the Closed-end fundAn investment company that sells shares like any other corporation and usually does not Commission brokerA broker on the floor of an exchange acts as agent for a particular brokerage house and CompensationAll forms of pay given to an employee in exchange for services rendered. ContractA term of reference describing a unit of trading for a financial or commodity future. Also, the actual ConvertibilityThe degree of freedom to exchange a currency without government restrictions or controls. convertible bondBond that the holder may exchange for a specified number of shares. ConvertiblesSecurities (generally bonds or preferred shares) that are exchangeable at the option of the holder for common shares of the issuing firm. Counter tradeThe exchange of goods for other goods rather than for cash; barter. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Covered interest arbitrageA portfolio manager invests dollars in an instrument denominated in a foreign Crawling pegAn automatic system for revising the exchange rate. It involves establishing a par value around Cross ratesThe exchange rate between two currencies expressed as the ratio of two foreign exchange rates Currency arbitrageTaking advantage of divergences in exchange rates in different money markets by Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |