Archives: Terms

Definition of Currency Swap A currency swap is a financial agreement between two parties to exchange principal and/or interest payments in one currency for equivalent amounts in another currency over a specified period. This type of financial instrument is often used by businesses and governments to secure lower interest rates […]

Definition of Currency Risk Currency risk, also known as exchange rate risk, refers to the potential for financial loss resulting from fluctuations in the exchange rate between two currencies. It affects any party holding assets, conducting transactions, or operating in currencies other than their domestic currency. This risk can impact […]

Definition of Currency Reform Currency reform refers to a significant change in a country’s currency system, where new currency units replace the old ones at a certain conversion rate. These reforms are usually undertaken to tackle problems such as hyperinflation, to stabilize the economy, to simplify monetary transactions, or to […]

Definition of Currency Depreciation Currency depreciation refers to the decrease in the value of one currency against another in a floating exchange rate system. This phenomenon means that more units of the depreciating currency are needed to purchase a single unit of another currency. Currency depreciation can occur due to […]

Definition of Currency Appreciation Currency appreciation refers to the increase in the value of one currency relative to another in the foreign exchange markets. This phenomenon occurs when a currency’s demand, often driven by factors such as higher interest rates, economic stability, and growth prospects, outweighs its supply. As a […]

Definition of Cumulative Preference Share Cumulative preference shares are a type of preferred stock that grants holders the right to receive dividends in arrears before any dividends can be distributed to common shareholders. If the issuing company is unable to pay the dividend in one year, it accumulates and must […]

Definition of Cumulative Distribution Function The Cumulative Distribution Function (CDF) of a random variable is a function that gives the probability that the variable takes a value less than or equal to a certain value. It is a fundamental concept in probability theory and statistics, providing a complete description of […]

Definition of Cum Dividend The term cum dividend refers to a stock that is sold with the right of the buyer to receive the dividend for the current dividend period. The word “cum” is a Latin word for ‘with’. Therefore, when a stock is in the ‘cum dividend’ phase, it […]

Definition of Cross-Subsidization Cross-subsidization is a pricing strategy where the profit from one product or service subsidizes the losses or lower profits of another product or service within the same organization. This approach allows companies to offer certain products or services at a lower price point, potentially below cost, to […]

Definition of Cross-Section Data Cross-section data refers to data collected at a single point in time from multiple individuals, households, firms, countries, or any other units of observation. This type of data allows researchers and analysts to capture a snapshot of a population at a specific moment, providing insights into […]