Outturn and Sanctions: Difference between pages

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1.  
1. ''International trade.''
'Outturn' market rates are the rates or prices which actually occur in the relevant market - in other words the rates which 'turn out' to be the case in the market.
Outturn market rates may be compared with, for example, forecast rates, expected rates, or hedged rates.


For example if hedging a borrowing with an interest rate option with a strike price of 6%.
In the context of international trade, economic sanctions are government regulations which prohibit trade with specified countries or prohibit the trading of particular goods (usually military in nature) with specified countries.
At an outturn market rate of 8% the borrower's option would be exercised (and pay out to the holder assuming it was cash-settled).
At an outturn market rate of 5% the borrower's option would lapse worthless.


Outturn rates in this sense are related to - but different from - the all-in hedged rates achieved. The ''hedged rate achieved'' means the total income or expense resulting, taking account both of the underlying exposure and of the hedging instrument.


So continuing the same example, and assuming an option premium paid of 0.5%.
2. ''International relations.''


i. At an outturn rate of 5%, the hedged rate borrowing achieved = 5% market rate + 0.5% option premium = 5.5%.
Sanctions may also impose tariffs, other economic disadvantages or sporting or cultural restrictions on a specified country, with the aim of exerting political pressure on its government.


ii. At an outturn rate of 8%, the hedged borrowing rate achieved = 6% option strike price + 0.5% option premium = 6.5%.


2.  
3. ''Law - international law.''
The result or the net result of any activity.
 
More broadly, a sanction can be any legally imposed penalty, punishment, or the threat of one.


3.
The all-in hedged rate or outcome achieved, as a result of hedging activities.


== See also ==
== See also ==
* [[Expectations theory]]
* [[Blocking Regulation]]
* [[Hedging]]
* [[Boycott]]
* [[Compliance]]
* [[Geopolitical risk]]
* [[International law]]
* [[International trade]]
* [[Law]]
* [[OFAC]]
* [[OFSI]]
* [[Quota]]
* [[Sanction]]
* [[Sanctions screening]]
* [[Side pocket]]
* [[Tariff]]
 
 
== Other ACT resources==
*[https://www.treasurers.org/hub/technical/russia-ukraine Russia-Ukraine crisis - resources for treasurers - sanctions lists]


[[Category:Accounting,_tax_and_regulation]]

Revision as of 18:35, 1 October 2022

1. International trade.

In the context of international trade, economic sanctions are government regulations which prohibit trade with specified countries or prohibit the trading of particular goods (usually military in nature) with specified countries.


2. International relations.

Sanctions may also impose tariffs, other economic disadvantages or sporting or cultural restrictions on a specified country, with the aim of exerting political pressure on its government.


3. Law - international law.

More broadly, a sanction can be any legally imposed penalty, punishment, or the threat of one.


See also


Other ACT resources

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