Glossary

Forex, or foreign exchange, is the global marketplace for trading national currencies against one another. It is the largest financial market in the world, with a daily trading volume exceeding $6 trillion.

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation, and it is often measured by the Consumer Price Index (CPI).

An interest rate is the amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal. It can influence economic activity, affecting consumer spending and investment decisions.

Liquidity refers to how easily an asset can be converted into cash without affecting its market price. High liquidity means assets can be quickly sold, while low liquidity indicates that selling may take longer and could impact the price.

Market capitalization, or market cap, is the total market value of a company's outstanding shares of stock. It is calculated by multiplying the share price by the total number of shares and is used to assess a company's size and investment potential.