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Flashcards in Fin 3718 Mid-term Deck (51):
1

3 Types of Commodities

1.) financial
2.) agricultural
3.) minerals

2

Financial Commodities

-gold and precious
-currency
-bonds and other financial assets

3

Agricultural Commodities

-cotton
-corn
-wheat
-orange juice

4

Mineral Commodities

-oil
-copper
-silver
-platinum

5

Letter of Credit LOC

-letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount
-if the buyer is unable to make the payment, the bank will be required to cover the amount

6

Banker's Acceptance BA

-a short-term debt instrument issued by a company that is guaranteed by a commercial bank
-specifies the amount of money, the date, and the person to whom the payment is due
-specified date is usually 90 days but can range from 1-180

7

Bill of Exchange B/E

-also called a draft
-a written order requesting one party to pay a specified amount of money at a specified time to the writer of the bill

8

Bill of Lading

-a legal document between the shipper of goods and the carrier detailing the type, quantity, and destination of the goods being carried

9

Bretton Woods

-an agreement negotiated at a 1944 international conference that was in effect from 1945 to 1971 that established the IMF
-$35/oz Gold

10

International Monetary Fund IMF

-created after WWII to supplement countries in time of economic catastrophe by promoting global monetary and exchange stability

11

IMF Core Goal

-is to economically strengthen its member countries

12

IMF was created with the intention of:

-promoting global monetary and exchange stability
-facilitating the expansion and balanced growth of international trade
-assisting in the establishment of a multilateral system of payments for current transactions

13

Balance of Payments

-record of transactions between a country and the rest of the world
-these transactions are made by individuals, firms, and government bodies

14

Balance of Payments Main Accounts

1.) current account
2.) capital account
3.) financial account
4.) foreign exchange currency account

15

Current Account

-keeps track of the transactions in the past year

16

Capital Account

-account of all investments made between countries

17

Financial Account

-gold, silver that are exchanged with the exchange of currency

18

Maastrick Treaty

-a treaty among the 12 European Union countries that specified a plan and timetable for the introduction of a single European currency, to be called the euro

19

What does this notation mean _/_ in dealing with currencies?

-currency notation
-whatever is on the left of the / is the base currency
-says how many of the right needs to make $1 one the left.

20

Continuous Link Settlement CLS Systems

-system that eliminates losses if either party of a foreign exchange transaction is unable to settle with another party

21

Spot Transaction

-contracts that are currently happening today
-a foreign exchange transaction to be paid for on the second following business day

22

Forward Transaction

-contracts that are made for future deliveries
-an agreed-upon foreign exchange transaction to be settled at a specified future date, often 1, 2, or 3 months after the transaction date

23

Swap Commodity Transaction

-the simultaneous purchase and sale of foreign exchange or securities, with the purchase executed at once and the sale back to the same party carried out at an agreed-upon price to be completed at a specified future date
-include interest rate swaps, currency swaps, and credit swaps

24

Yield Curve

-a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates

25

London Interbank Offered Rate LIBOR

-is a benchmark rate that some of the world's leading banks charge each other for short-term loans
-serves as the first step to calculating interest rates on various loans throughout the world

26

Bolivar

-Venezuelan Bolivar Black Market
-when there was a shortage of currency in Venezuela it was obtained through this black market
-it was Unseen and illegal

27

5 Institutional Participants

1.) bank and non-bank exchange dealers
2.) commercial business B2B
3.) speculators and arbitragers
4.) central banks and treasuries
5.) FOREX brokers

28

DXY

-US dollar index
-measure of the value of US dollar relative to foreign currencies

29

Broker Dealers

-person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers
-are at the heart of the securities and derivatives trading process

30

Gold Reserve

-a quantity of gold held by a central bank to support the issue of currency

31

The 3 business segments of the oil and gas industries

1.) upstream
2.) mid-stream
3.) downstream

32

Upstream

-operations stage
-exploration and production

33

Mid-Stream

-processing, storing, and transporting, and marketing of oil and natural gas

34

Mid-Stream transportation

-pipeline, rail, barge, oil tanker, or truck

35

Downstream

-refining and marketing

36

Where are the largest 5 refiners located in the United States?

-Port Arthur, TX
-Texas City, TX
-Baytown, TX
-Garyville, LA
-Baton Rouge, LA

37

Top 5 refining capacity by country

1.) US
2.) China
3.) Russia
4.) India
5.) Japan

38

Sour Crude

-high amount of sulfur
-processed into heavy oil like diesel and fuel oil to decrease processing expenses

39

Sweet Crude

-low amount of sulfur
-elevate yields of high-value products, including gasoline, diesel fuel, heating oil, and jet fuel

40

Light Crude

-low viscosity, higher price because its easier to refine

41

Heavy Crude

-highly viscous, cheaper than light because production problems

42

NOCs

-network operations center, or "network management center",
-is one or more locations from which network monitoring and control, or network management, is exercised over a computer, telecommunication or satellite network.

43

OPEC Members

-Iran
-Iraq
-Kuwait
-Saudi Arabia
-Venezuela
-United Arab Emirates
-Qatar
-Libya
-Algeria
-Indonesia
-Nigeria
-Angola
-Ecuador
-Gabon

44

Members that founded OPEC

-Iran
-Iraq
-Kuwait
-Saudi Arabia
-Venezuela

45

Which countries left OPEC

-Gabon
-Indonesia

46

Non-OPEC Members

-Russia
-Mexico
-Brazil
-China
-Norway
-India
-United Kingdom
-United States
-Canada

47

Countries that are Free Markets

-United Kingdom
-United States
-Canada

48

Energy Information Administration EIA

-a principal agency of the U.S federal statistical system responsible for collecting, analyzing, and disseminating energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment

49

What are the 3 things that change the value of currency?

1.) war
2.) political upheaval
3.) severe economic conditions

50

NYMEX

-New York Mercantile Exchange
- a commodity futures exchange owned and operated by CME Group of Chicago.
-handles billions of dollars' worth of energy carriers, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems for future delivery

51

ICE

-Intercontinental exchange
-fortune 500 company that connects the largest community of participants in all major markets at key phases of the investing, trading, hedging and capital raising lifecycle.