Counterparty Credit Risk

Credit risk is the possibility that a person or organisation will default on their loan repayments. Defining credit risk is key to calculating the interest rate on a loan. The…

Country risk

Country risk is the total risk associated with an investment in a foreign country. It includes political risk, changes to regulation and corporate law, economic risk, transfer risk, currency risk…

Credit risk

Credit risk is the possibility that an individual or organisation will default on their loan repayments. Defining the credit risk is key to calculating loan interest rates. The longer the…

Critical terms match (CTM) method

The critical terms match method is one of the qualitative techniques prescribed by the international accounting standards to test the effectiveness of a hedging relationship. Businesses using hedging strategies to minimise…

Cross rates

Cross rates are used to calculate the exchange rate for a currency pair whose exchange rate is not commonly quoted, for example, EUR/GBP, JPY/CHF or AUD/MXN. This process is known as…

Cross-border payments

Cross-border payment is a term referring to transactions involving individuals, companies, banks or settlement institutions operating in at least two different countries. More info Live…

Cross-border risk

Cross-border risk describes the volatility of returns on international investments relating to events associated with a particular country, as opposed to events that affect a particular economic or financial player. Cross-border…

Cross-border trade (CBT)

Cross-border trade (CBT) is the exchange of goods or services between two countries. It is also known as international trade and international selling. When the two countries involved have different currencies,…

Cross-Currency Swaps

Cross-currency swaps are over-the-counter financial products based on an agreement to exchange the principal and/or interest payments on a loan in one currency for an equivalent loan and interest payment…

Cross-forward exchange rate

Also known as a cross-forward exchange rate, this is the exchange rate applied to currency forward contracts involving two currencies other than the U.S. dollar. The term cross rate forward…

Cross-hedging

Cross-hedging, or a cross hedge, refers to an investment strategy that involves covering the financial risk arising from a certain trading position by purchasing another financial instrument whose price action…

Cumulative translation adjustment (CTA)

The cumulative translation adjustment (CTA) for a currency translation adjustment is an entry in the “Accumulated Other Comprehensive Income” section of the translated balance sheet, reflecting gains and losses caused…

Currency appreciation

Currency appreciation refers to the increase in the value of one currency against another. For instance, when the EUR/USD exchange rate moves from 1.10 to 1.15, it means that the euro…

Currency call option

A currency call option is the opposite of a currency put option. The holder of a currency call option has the right, but not the obligation, to buy a currency…

Currency codes

Currency codes or country currency codes are three-character combination codes representing each one of the world currencies in circulation (except several minor currencies, that are pegged to a bigger one).