Exchange rate
In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another. It is also reg...
Exchange rate regime
An exchange-rate regime is the way an authority manages its currency in relation to other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally...
Interest rate parity
Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries. The fact tha...
Capital Asset Pricing Model
In finance, the capital asset pricing model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well-diversified por...
Net capital outflow
Net Capital Outflow (NCO) is the net flow of funds being invested abroad by a country during a certain period of time (usually a year). A positive NCO means that the country invests outside more than ...
Currency board
A currency board is a monetary authority which is required to maintain a fixed exchange rate with a foreign currency. This policy objective requires the conventional objectives of a central bank to be...
Dollarization
Currency substitution occurs when the inhabitants of a country use a foreign currency in parallel to or instead of the domestic currency.Currency substitution can be full or partia...
Efficient frontier
The efficient frontier is a concept in modern portfolio theory introduced by Harry Markowitz and others in 1952.
A combination of assets, i.e. a portfolio, is referred to as "efficient" if it has ...
Fixed exchange rate system
A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime where a currency's value is fixed against either the value of another single currency, to a basket of ...
Floating exchange rate
A floating exchange rate or fluctuating exchange rate is a type of exchange-rate regime in which a currency's value is allowed to fluctuate in response to market mechanisms of the foreign-exchange mar...