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Archie has a savings account at a bank. If he earns 6 percent interest on his account and if there is deflation, then his purchasing power rises by more than 6 percent over the course of a year.
Political Risk
The risk of losing money due to political instability or changes in government policy affecting an investment.
American Options
A type of options contract that allows the holder to exercise the option at any time before the expiration date.
Capital Budgeting
The process of evaluating and selecting long-term investments that are consistent with the firm's goal of maximizing owner wealth.
Foreign Currency
Currency used in a country other than one's own, involved in international transactions or investment opportunities.
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