Ch 001 PPT 国际金融.pptx

Chapter One;Chapter One Outline;What’s Special about “International” Finance?; Foreign Exchange Risk This is risk that foreign currency profits may evaporate in dollar terms due to unanticipated unfavorable exchange rate movements. Suppose $1 = ￥100 and you buy 10 shares of Toyota at ￥10,000 per share. One year later the investment is worth ten percent more in yen: ￥110,000. But, if the yen has depreciated to $1 = ￥120, your investment has actually lost money in dollar terms.;Monthly Percentage Change in Japanese Yen—U.S. Dollar Exchange Rate; Political Risk Sovereign governments have the rig