Capital and Money Markets - Lesson Summary
Once a company has identified its level of exposure and determined the critical exposure, it can hedge its position by adopting operational and financial strategies that have cost-benefit and operational implications.
The financial market is a mechanism that facilitates the transfer of funds from lenders to borrowers.
The international financial market is a worldwide marketplace in which buyers and sellers trade financial assets such as stocks, bonds, currencies, commodities and derivatives, across national borders.
The money market is a mechanism for facilitating and promoting transactions in short term funds or financial instruments.
Capital mobility refers to the extent to which savers can move funds across national borders for the purpose of buying financial instruments issued in other countries.
Bootstrapping is a statistical method that reduces the noise and also identifies the outliers in the data collected from market participants.
A Eurocurrency is any foreign currency-denominated deposit by national governments or financial institutions in banks outside their home market.
The Eurocurrency market is a major source of finance for international trade because of its ease of convertibility and the absence of domestic restrictions on trading.
Commercial papers are unsecured short-term debt instruments that are issued by corporations and banks to raise short-term cash for the financing of accounts payable, inventories and short term liabilities.
Trade promotion is an umbrella term for economic policies, development interventions and private initiatives aimed at improving the trade performance of the country or a region within a country.
A bill of entry is an account of goods that have entered a custom house both imports and exports, that details the merchant, the number of goods, their place of origin and their destination.
An import broker is a certified specialist who obtains required government permissions and other clearances before forwarding the necessary documents to the carrier of the goods.
A pro forma invoice is a key document that represents a letter of intent from the exporter to the importer that outlines the selling terms, price, and the delivery of the goods are actually shipped.
A duty drawback scheme enables an exporter to obtain a refund of the customs and excise duty that are chargeable on imported materials that are used in the manufacturing of exported goods.