exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. Currency diversification Using more than one currency as an investing or financingstrategy. Exposure to a diversified currency portfolio typically entails less exchange rate risk than if all the portfolio exposure were in a single foreign currency. Currency Exchange Risk Uncertainty about the rate at which revenues or costs denominated in one currency can be converted into another currency. Currency futures contract Contract specifying a standard volume of a particular currency to be exchanged on a specific settlement date. Currency future A financial future contract for the delivery of a specified foreign currency. Currency hedge Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks). Currency in circulation Paper money, coins, and demand deposits that constitute all the money circulating in the economy. Currency no longer issued Old and new series gold and silver certificates, Federal Reserve notes, national banknotes, and 1890 Series Treasury notes. Currency put option Contract that gives the holder the right to sell a particular currency at a specified price (exchange rate) within a specified period of time. Currency option An option to buy or sell a foreign currency. Currency overvaluation Applies mainly to international equities: (1) consideration that a currency is overvalued if private demand for the currency at the going exchange rate is less than total private supply (i.e., central banks are buying up the difference, supporting the value of the currency through foreign exchange intervention); (2) currency value exceeding purchasing power parity. Currency revaluation A deliberate upward adjustment in the official exchange rate established, or pegged, by government against a specified standard, such as another currency or gold. Currency risk Related: Exchange rate risk Currency selection Asset allocation in which the investor chooses among investmentsdenominated in different currencies. Currency swap An agreement to swap a series of specified payment obligationsdenominated in one currency for a series of specified payment obligations denominated in a different currency. Usually fixed for fixed. Current account Net flow of goods, services, and unilateral transactions (gifts) between countries. Current account balance The difference between the nation's total exports of goods, services and transfers and its total imports of them. Current account balance calculations exclude transactions in financial assets and liabilities. Current assets Value of cash, accounts receivable, inventories, marketable securities and other assets that could be converted to cash in less than 1 year. Current coupon A bond selling at or close to par, that is, a bond with a coupon close to the yields currently offered on new bonds of a similar maturity and credit risk. Current Coupon Bond Bonds on which the coupon is set approximately equal to the bonds'yield to maturity at the time of their issuance. Current-coupon issues Related: Benchmark issues Current dollar Refers to the use of actual or real prices and costs. Escalation or inflation effects are included. Current income Regular series of cash flows that is routinely received