exchange currencies at a specified rate during a specified delivery month; standardized contract on specified underlying currencies, in multiples of standard amounts. Purchased and traded on a regulatedexchange on which margins are posted. Foreign currency option An option that conveys the right (but not the obligation) to buy or sell a specified amount of foreign currency at a specified price within a specified time period. Foreign currency translation The process of restating foreign currency accounts of subsidiaries into the reporting currency of the parent company in order to prepare consolidated financial statements. Foreign direct investment (FDI) The acquisition abroad of physical assets such as plant and equipment, with operating control residing in the parent corporation. Foreign equity market Issuesfloated by foreign companies in the domestic equity market. Foreign exchange Currency of another country. Abbreviated Forex. Foreign exchange broker Intermediaries in the foreign exchange market that do not put their own money at risk. Foreign exchange controls Various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents. Foreign exchange dealer A firm or individual that buys foreign exchange from one party and then sells it to another party. The dealer makes the difference between the buying and selling prices, or the spread. Foreign exchange market Largely banks that serve firms and consumers who may wish to buy or sell various currencies. Foreign exchange rate The rate of one currencyunit expressed in terms of another. Foreign exchange risk The risk that a long or short position in a foreign currency might have to be closed out at a loss due to an adverse movement in exchange rates. Foreign exchange swap An agreement to exchange stipulated amounts of one currency for another currency at one or more future dates. Foreign holdings The percentage of a portfolio'sinvestments represented by stocks or American Depository Receipts (ADRs) of companies based outside the United States. Foreign investment risk matrix (FIRM) Graph that displays financial and political risk by intervals on which countries may be compared according to riskratings. Foreign official institutions Central governments of foreign countries, including all departments and agencies of national governments; central banks, exchange authorities, and all fiscal agents of foreign national governments that undertake activities similar to those of a treasury, central bank, or stabilization fund; diplomatic and consular establishments of foreign national governments; and any international or regional organization, including subordinate and affiliateagencies, created by treaty or convention between sovereign states. Foreign market Part of a nation's internal market, representing the mechanisms for issuing and tradingsecurities of entities domiciled outside that nation. Compare external market and domestic market. Foreign market beta A measure of foreign marketrisk that is derived from the capital asset pricing model. Foreign public borrower Foreign official institutions; the corporations and agencies of foreign central governments, including development banks and institutions, and other agencies that are majority owned by the central government or its departments; and state, provincial and local governments of foreign countries and their departments and agencies. Foreign Sales Corporation (FSC) A special type