Foreign exchange reserves

Definition:

Strict definition is the total of a country's foreign currency deposits and bonds held by the central bank and monetary authorities. However, the term often refers to the total of a country's gold holdings, convertible foreign currencies held in its banks, plus special drawing rights (SDR) and exchange reserve balances with the International Monetary Fund (IMF).

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Perfect hedge

A situation in which the profit and loss from the underlying asset and the hedge position are equal.

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