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International Financial Markets

Essay by   •  July 16, 2011  •  Essay  •  315 Words (2 Pages)  •  2,422 Views

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International Financial Markets .Within the context of the multinational firm, the course examines the development of policy; financing options for international business; and the making of standard financial management decisions.

The forces of globalization and its implications for the multinational firm.

* The operation of the international financial system, it's current state, challenges for the future.

* Different types of foreign exchange exposure faced by the MNC.

* The structure of international financial markets and institutions, the range of

instruments traded therein.

* Financial management decision of multinational firms differ from those operations.

There are several terms that you need to understand before moving further in this course.

* Foreign currency exchange rate is the price of one country's currency in units of another currency or commodity.

* Spot exchange rate is the quoted price for foreign exchange to be delivered at once, or in two days for interbank transactions.

* Forward rate is the quoted price for foreign exchange to be delivered at a specified date in the future.

* Forward premium or discount is the percentage difference between the spot and forward exchange rate.

* Devaluation of a currency refers to a drop in foreign exchange value of a currency that is pegged to gold or to another currency.

* Weakening, deterioration, or depreciation of a currency refers to a drop in the foreign exchange rate that is pegged to gold or to another currency.

* Soft or weak describes a currency that is expected to devalue or depreciate relative to major currencies. It also refers to currencies whose values are being artificially sustained by their governments.

* Eurocurrencies are sometimes viewed as another kind of money, although in reality they are domestic currencies of one country on deposit in a second country. Their value is identical to that of the same currency at home.

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