Global strategy: Strategy focusing on increasing profitability by reaping cost reductions from experience curve and location economies.

Floating Exchange Rates: A system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand.

Fixed Exchange Rates: A system under which the exchange rate for converting one currency to another is fixed.

Forward Exchange Rate: The exchange rates governing forward exchange transactions.

Spot Exchange Rate: The exchange rate at which a foreign exchange dealer will convert one currency into another that particular day.

Purchasing Power Parity (PPP): An adjustment in gross domestic product per capita to reflect differences in the cost of living.

Arbitrage: Arbitrage is the simultaneous buying and selling of foreign currencies with the intention of making profits from the difference between the exchange rate prevailing at the same time in different markets

Swap Operations: A swap is defined as a financial transaction in which two counter parties agree to exchange streams or payments, or cash flows, over time on the basis agreed at the beginning of the arrangement.

Options: An option is a contract giving the owner the right, but riot the obligation, to buy or sell a given quantity of an asset at a specified price at sonic time in the future.

Future Contract: A future contract has been defined on "the simultaneous right and obligation to buy or sell a standard quantity of a specific financial instrument (or commodity or currency) at a specific future date and at a price agreed between the parties at the time the contract was signed."

Forward Market: A forward contract (also called an outright forward) is one where the parties to the transaction agree to buy or sell a commodity (here, a currency) at a predetermined future date at a particular price.

Spot Market: The spot market involves almost the immediate or sale of foreign exchange. Typically cash settlements are made within one/two days.

Foreign Debt Crisis: Situation in which a country cannot service its foreign debt obligations, whether private sector or government debt.

Currency Crisis: Occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates to defend the prevailing exchange rate.

Gold Standard: The practice of pegging currencies to gold and guaranteeing convertibility.