Introduction to international finance pptx

CHAPTER 1: INTRODUCTION TO
INTERNATIONAL FINANCE
1. Introduction to International finance
2. Financial instruments
3. International financial market
1. Introduction to International finance
2. Financial instruments
3. International financial market
1. Introduction to International finance
1.1. Why is International Finance Important?
219/12/10 B02013 - Introduction to
International finance
Why is International Finance Important?
 Companies (and individuals) can raise funds,
invest money, buy material, produce goods and
sell products and services overseas.
 With these increased opportunities comes
additional risks. We need to know how to identify
these risks and then how to control or remove
them.
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 Companies (and individuals) can raise funds,
invest money, buy material, produce goods and
sell products and services overseas.
 With these increased opportunities comes
additional risks. We need to know how to identify
these risks and then how to control or remove
them.
19/12/10 B02013 - Introduction to
International finance
1.2. What is different about international

Financial Management?
1.2.1. Culture, history and institutions
1.2.2. Corporate governance
1.2.3. Foreign Exchange Risk
1.2.4. Political Risk
1.2.5. Market Imperfections
1.2.6. Expanded Opportunity Set
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1.2.1. Culture, history and institutions
1.2.2. Corporate governance
1.2.3. Foreign Exchange Risk
1.2.4. Political Risk
1.2.5. Market Imperfections
1.2.6. Expanded Opportunity Set
19/12/10 B02013 - Introduction to
International finance
2. Financial instruments:
• Cash
• Shares
• Bonds
• Other cash instruments such as loans and
deposits
• Derivative instruments
• Cash
• Shares
• Bonds
• Other cash instruments such as loans and
deposits
• Derivative instruments
519/12/10 B02013 - Introduction to

International finance
3.1.International capital transfer.
• Unilateral transfer
• Bilateral transfers
• Multilaterals transfer.
3. International Financial Market
3.1.International capital transfer.
• Unilateral transfer
• Bilateral transfers
• Multilaterals transfer.
619/12/10 B02013 - Introduction to
International finance
3.2. Classification of Financial Market
3.2.1. Form of Financial Instruments
• Equity market
• Bonds market
• Foreign exchange markets
3.2. Classification of Financial Market
3.2.1. Form of Financial Instruments
• Equity market
• Bonds market
• Foreign exchange markets
719/12/10 B02013 - Introduction to
International finance
3.2.2. Length of Maturity
– Currency market
– Capital market
3.2.3. Kind of Trading:
- Primary Market
- Secondary Market

- Collateralized Mortgage Obligations
- Future contracts.
3.2.2. Length of Maturity
– Currency market
– Capital market
3.2.3. Kind of Trading:
- Primary Market
- Secondary Market
- Collateralized Mortgage Obligations
- Future contracts.
819/12/10 B02013 - Introduction to
International finance
Discussion questions
• What are the Advantages and
disadvantages of financial instruments?
• Update financial news
• What are the Advantages and
disadvantages of financial instruments?
• Update financial news
919/12/10 B02013 - Introduction to
International finance