Glossary

Offer Rates

The rate at which a market maker is willing to sell the quoted asset. Also known as ask rates.

Offering Statement

In the United States, a shortened registration statement required by the Securities and Exchange Commission on debt issues with less than a 9-month maturity.

Official Settlements Balance

An overall measure of a country’s private financial and economic transactions with the rest of the world. Also known as overall balance.

Offshore Financial Centers (OFCs)

The many types of financial institutions that operate without financial supervision by governments or other agencies.

Oligopoly

A market dominated by so few sellers that action by any of them will impact both the price of the good and the competitors.

Open Account

The seller delivers the goods to the buyer and then bills the buyer according to the terms of trade.

Open and Reform Policy

An economic policy enacted by the Chinese government combining central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits, with the goal of moving from a centrally-planned economy to a market-based one.

Open-end Fund

A mutual fund in which the amount of money under management grows/shrinks as investors buy/sell the fund.

Operating Cash Flow

Earnings before interest and depreciation minus taxes. It measures the cash flow generated from operations, not counting capital spending or working capital requirements.

Operating Exposure

Changes in the value of real (nonmonetary) assets or operating cash flows as a result of changes in currency values.

Operating Leverage

The trade-off between fixed and variable costs in the operation of the firm.

Operational Efficiency

Market efficiency with respect to how large an influence transactions costs and other market frictions have on the operation of a market.

Opportunity Cost

Most valuable alternative that is given up. The rate of return used in NPV computation is an opportunity interest rate.

Opportunity Set

The set of all possible investments.

Orderly Marketing Agreements

Agreements between two or more governments to hold back the growth of trade for certain products by limiting exports and imposing import quotas.

Organization for Economic Cooperation and Development (OECD)

A group of 30 countries that meets regularly to discuss global issues and make appropriate economic and social policies.

Organization of American States (OAS)

A regional organization created in 1948 promoting the economic and social development of Latin America. Members include the U.S., Mexico, most of South and Central America, and most of the Caribbean nations.

Organization of Petroleum Exporting Countries (OPEC)

A producer cartel that produces and sells oil.

Out-of-the-money option

An option that has no value if exercised immediately.

Outright Quote

A quote in which all of the digits of the bid and offer prices are quoted (contrast with points quote).

Outsourcing

A situation in which a firm's functions are performed or provided by a person or group from outside the company.

Outward Swap

Purchasing foreign currency today and reselling it at a forward rate against the domestic currency.

Overall Balance

(See official settlements balance).

Overall FTC Limitation

In the U.S. tax code, a limitation on the FTC equal to foreign-source income times U.S. tax on worldwide income divided by worldwide income.

Overseas Private Investment Corporation (OPIC)

A US agency that assists US companies protect their investment against risk in a particular country besides providing other services.

Ownership-specific Advantages

Property rights or intangible assets, including patents, trademarks, organizational and marketing expertise, production technology and management, and general organizational abilities, that form the basis for the multinational’s advantage over local firms.