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Foreign Exchange 101

For many, Foreign Exchange is, well, foreign to them. Foreign Exchange, also referred to as Forex or FX, is the exchange or the conversion of one currency to another. Given the globalization of the economy, Forex transactions total more than $5 trillion daily making the Forex Market the most liquid in the world.  The U.S. Dollar (USD) is the most widely traded currency followed by the Euro, the Yen and the British Pound.  Forex rates are used to convert one currency to another and create parity between the currencies.

How Does Forex Work?
Let’s start with a simple example of a…

Capital Call Lines 101

A capital call line is a revolving line of credit that a lender provides to a private equity group (PEG). The line of credit is collateralized with a pledge of the right to call and receive capital contributions from the fund’s investors. Advances from the line are primarily used to bridge capital calls and for short-term working capital. To better understand, here is a review of the common terms associated with capital call lines:

  • PEGs are closed-end investment companies that invest in businesses and/or commercial real estate.
  • Investors in PEGs are typically high-net-worth individuals, institutions (such as insurance companies,…
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