Principal Exchange Rate Linked Security - PERL

AAA

DEFINITION of 'Principal Exchange Rate Linked Security - PERL'

A type of debt security that pays interest semiannually and has a yield that is linked to foreign exchange rates. PERLs are denominated in U.S. dollars, but their repayment is determined by the exchange rate between the dollar and a specific foreign currency within a certain time frame. Many companies will purchase PERLs as a means of hedging against foreign exchange risk.

INVESTOPEDIA EXPLAINS 'Principal Exchange Rate Linked Security - PERL'

A company wishing to expand into a foreign currency can safely do so via the purchase of PERLs. The PERLs allow for the currency to retain a link to the dollar. Reverse PERLs are denominated in one currency, but pay interest in another.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Translation Risk

    The exchange rate risk associated with companies that deal in ...
  3. Municipal Inflation-Linked Securities

    Investment vehicles issued by various levels of governments containing ...
  4. Basket Retention

    An insurance policy that covers exposures to several different ...
  5. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  6. Peer-To-Peer (Virtual Currency)

    The exchange or sharing of information, data, or assets between ...
Related Articles
  1. Mutual Funds & ETFs

    Hedge Against Exchange Rate Risk With Currency ETFs

    Currency moves are unpredictable and can have an adverse effect on portfolio returns. Find out how to protect yourself.
  2. Bonds & Fixed Income

    6 Factors That Influence Exchange Rates

    Find out how a currency's relative value reflects a country's economic health and impacts your investment returns.
  3. Forex Education

    The Ins And Outs Of Corporate Eurobonds

    Corporate eurobonds simplify expansion for MNCs, though there are a few more hoops to jump through.
  4. Personal Finance

    Make The Most Of LinkedIn For Your Job Search

    Why LinkedIn is such a great job-hunting tool – if you tailor your profile for the biggest impact and stay visible in the right way.
  5. Retirement

    Read This Before You Retire In The Philippines

    The Philippines has a warm climate, a low cost of living and plenty of people who speak English. What to do next if you think you want to retire there.
  6. Economics

    Can Internet companies be vertically integrated?

    Find out how online businesses are beginning to take advantage of vertical integration for many of the same reasons as traditional businesses.
  7. Trading Strategies

    What are the best technical indicators that complement the Relative Vigor Index (RVI)?

    Discover some of the best technical indicators that traders and analysts can employ to supplement the use of the relative vigor index (RVI).
  8. Technical Indicators

    What are the best technical indicators that complement the Relative Strength Index (RSI)?

    Learn some of the best additional technical indicators that can be used along with the relative strength index to anticipate trend changes in a market.
  9. Options & Futures

    How do you trade put options on E*TRADE?

    Learn all about put option trading at E*TRADE. Explore margin accounts and become familiar with the different types of option writing.
  10. Options & Futures

    Do you have to be an expert investor to trade put options?

    Learn about investing in put options and the associated risks. Explore how options can provide risk, which is precisely defined to predetermined limits.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center