The country-specific hedge portfolio in the International Asset Pricing Model serves as a store of value (like the risk-free asset in the CAPM) as well as a hedge against the currency risk of the market portfolio.

In the U.S. tax code, interest income that has been subject to a foreign gross withholding tax of 5 percent or more.

Private investment partnerships with a general manager and a small number of limited partners.

Reducing the risk of a cash position by using the futures instruments to offset the price movement of the cash asset.

The ratio of derivatives contracts to the underlying risk exposure.

The rate of return over a given period.

A method of classification used by many countries to determine tariffs on imports.

Idea that all individuals have the same beliefs concerning future inestments, profits, and dividends.

The behavior of firms that fail to enter markets that appear attractive and, once invested, persist in operating at a loss. This behavior is characteristic of situations with high entry and exit costs along with high uncertainty.

An extremely high rate of inflation, often exceeding several hundred or several thousand percent, that causes a country's money to become practically worthless.

The tendency of investors to overinvest in assets based in their own country.

Volatility estimated from a historical time series.

A position or operation that offsets an underlying exposure. For example, a forward currency hedge uses a forward currency contract to offset the exposure of an underlying position in a foreign currency. Hedges reduce the total variability of the combined

The HIPC Inititiative is a major international response to the burdensome external debt held by the world's poorest, most indebted countries. It originated in 1996 as a joint undertaking of the World Bank and the International Monetary Fund (IMF).

Measured by the r-square in a regression of spot rate changes on futures price changes.