Dimensions of international finance

Jun 18th, 2015
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Which make international finance different from domestic finance. • Foreign exchange and political risk o Foreign exchange risk Foreign exchange rate is not fixed Volatility on foreign exchange affect international financial management It also affects on export and import management.

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Unit 1Dimensions of international financeWhich make international finance different from domestic finance.Foreign exchange and political risko Foreign exchange riskForeign exchange rate is not fixedVolatility on foreign exchange affect international financialmanagementIt also affects on export and import management.o Political riskIt ranges from change in unexpected tax rule to outrightexpropriation of assets held my foreigner.Market imperfectiono Perfect market is characterized byPerfect mobility of resourcesPerfect information with zero costNo transportation costo In the real world we foundLegal restrictionDiscriminatory taxationTransportation costCost of informationo Market imperfection represented various impediments preventing marketsfrom functioning perfectly, play an important role in motivatingMultinational Companies to locate production overseas.Expanded opportunity seto Due to globalization firms venture into global market, they can benefitfrom expanded opportunity setIntegration of global resourcesCan locate production plant anywhere of the worldi

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