Ch 001 PPT 国际金融概要1.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 right to regulate the movement of goods, capital, and people across their borders. These laws sometimes change in unexpected ways.; Market Imperfections Legal restrictions on the movement of goods, people, and money Transactions costs Shipping costs Tax arbitrage;The Example of Nestlé’s Market Imperfection;Nestlé’s Foreign Ownership Restrictions;The Example of Nestlé’s Market Imperfection; Expanded Opportunity Set It doesn’t make sense to play in only one corner of the sandbox. True for corporations as well as individual investors.;Goals for International Financial Management;Maximize Shareholder Wealth;Other Goals;Other Goals;Other Goals; Emergence of Globalized Financial Markets Emergence of the Euro as a Global Currency Europe’s Sovereign Debt Crisis of 2010 Trade Liberalization and Economic Integration Privatization Global Financial Crisis of 2008-2009 ;Deregulation of Financial Markets coupled with Advances in Technology have greatly reduced information and transaction costs, which has led to: Financial Innovations, such as Currency futures and options Multi-currency bonds Cross-border stock listings International mutual funds;Emergence of the Euro as a Global Currency;Euro Area;Europe’s Sovereign-Debt Crisis of 2010;The Greek Drama;Economic Integration;The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement among member countries that has reduced man