International Finance必看课件资料.ppt

International Finance International Finance Book for Use: International Financial Management Author: Choel S. Sun 6th Edition Press: China Machine Press For supplemented material of the book, please access to: /er6e INTERNATIONAL FINANCIAL MANAGEMENT EUN / RESNICK Second Edition 1 Globalization and International Finance (Chapter 1) Essential Readings P4-19 What’s Special about “ International Finance”? Foreign Exchange risk and political Risk Market Imperfections Expanded Opportunity What’s Special about “International” Finance? Foreign Exchange Risk The risk that foreign currency profits may evaporate in your home currency due to unanticipated unfavorable exchange rate movements. 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 free movement of goods, people, and money Transactions costs Shipping costs Tax arbitrage What’s Special about “International” Finance? Expanded Opportunity Set Firms can locate their production in any country or region of the world to maximize their profits. Firms can also raise funds in any capital market where the cost of capital is the lowest. What’s Special about “International” Finance? Deregulation of Financial Markets coupled with Advances in Technology have greatly reduced information and transactions costs, which has led to: Financial Innovations, such as Currency futures and options Multi-currency bonds Cross-border stock listings International mutual funds Reasons for Rapid Globalization