Glossary

Tangibility

Tangible assets are real assets that can be used as collateral to secure debt.

Tare Weight

The weight of a container and packing materials that excludes the weight of the goods it contains.

Targeted Registered Offerings

Securities issues sold to “targeted” foreign financial institutions according to U.S. SEC guidelines. These foreign institutions then maintain a secondary market in the foreign market.

Tariff Anomaly

The state of having a tariff on raw materials or semi-processed products be higher than the tariff on the corresponding finished product.

Tariff Escalation

The situation which duties are low or non-existent for raw materials, moderate for semi-manufactured goods and relatively high for finished products.

Tariff-quota

A tariff that is set at a lower rate until a specified quantity (the quota) of goods has been imported, at which point the tariff increases for additional imports.

Tariffs

Taxes on imported goods and services, levied by governments to raise revenues and create barriers to trade.

Tax Arbitrage

Arbitrage using a difference in tax rates or tax systems as the basis for profit.

Tax Clienteles

Clienteles of investors with specific preferences for debt or equity that are driven by differences in investors’ personal tax rates.

Tax Haven

A country or region imposing low or no taxes on foreign source income.

Tax Haven Affiliate

A wholly owned affiliate that is in a low-tax jurisdiction and that is used to channel funds to and from the multinational’s foreign operations. The tax benefits of tax-haven affiliates were largely removed in the United States by the Tax Reform Act of 1986.

Tax Holiday

A reduced tax rate provided by a government as an inducement to foreign direct investment.

Tax Neutrality

Taxes that do not interfere with the natural flow of capital toward its most productive use.

Tax Preference Items

Items such as tax-loss carryforwards and carrybacks and investment tax credits that shield corporate taxable income from taxes.

Technical Analysis

Any method of forecasting future exchange rates based on the history of exchange rates.

Temporal Method

A translation accounting method (such as FAS #8 in the United States) that translates monetary assets and liabilities at current exchange rates and all other balance sheet accounts at historical exchange rates. Also known as monetary/nonmonetary method.

Territorial Tax System

A tax system that taxes domestic income but not foreign income. This tax regime is found in Hong Kong, France, Belgium, and the Netherlands.

The National Trade Data Bank (NTDB)

Is the U.S. Government's most comprehensive source of international trade data and export promotion information. Types of information on the NTDB include: international market research, export opportunities; indices of foreign and domestic companies; how-to market guides; reports on demographic, political, and socio-economic conditions for hundreds of countries; and much more.

Tied Loan

A loan issued by a government requiring the borrower to spend the funds in the lending country.

Time Draft

A draft that is payable on a specified future dare.

Time Value of an Option

The difference between the value of an option and the option’s intrinsic value.

Timing Option

The ability of the firm to postpone investment (or disinventment) and to reconsider the decision at a future date.

Total Cash Flow of the Firm

Total cash inflow minus total cash outflow.

Total Quality Management (TQM)

An organization-wide approach to continuously improving the overall quality of its process, products, and service.

Total Risk

The sum of systematic and unsystematic risk (measured by the standard deviation or variance of return).

Trade Acceptance

A time draft that is drawn on and accepted by an importer.

Trade Balance

A country’s net balance (exports minus imports) on merchandise trade.

Trade Barrier

A governmental policy, action, or practice that intentionally interrupts the free flow of goods or services between countries.

Trade Deficit

A trade deficit occurs when the value of a country's exports is less than the value of its imports.

Trade Surplus

A trade surplus occurs when the value of a country's exports is greater than the value of its imports.

Trade-in Allowance

Price discount granted for a new item by turning in an old item at the time of purchase.

Trademark

A registration process under which a name, logo, or characteristic can be identified as exclusive.

Tradeoffs

A kind of interaction involving the offsetting of high costs in one section with lower or diminished costs in another.

Trading Desk

The desk at an international bank that trades spot and forward foreign exchange. Also known as dealing desk.

Transaction Exposure

Changes in the value of contractual (monetary) cash flows as a result of changes in currency values.

Transaction Statement

A document that clearly outlines the terms and conditions agreed upon between an importer and an exporter.

Transfer Prices

Prices on intracompany sales

Transfer Pricing

The price one unit of a company charges to another unit of the same company for goods or services exchanged between the two.

Translation Exposure

Changes in a corporation’s financial statements as a result of changes in currency values. Also known as accounting exposure.

Transparency

The observed degree of clarity, openness, measurability, and verifiability in a law, regulation, agreement, or trade practice.

Treaty of Tordesillas

Treaty between Spain and Portugal that divided the South American continent (among other lands) between the two countries. Ratified in 1494, it originally gave Spain much more land than Portugal.

Trustee

A bank or trust company that holds title to or a security interest in leased property for the benefit of the lessee, lessor, and/or creditors of the lessor.

Turnkey Contract

An agreement in which a contractor is responsible for setting up a facility from start to finish for another firm.

Tying Arrangement

The condition imposed by a seller which obliges a buyer to agree to purchase an additional product (tied product) if they wish to purchase their desired product (tying product).