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International Financial Market

In: Business and Management

Submitted By congtin1995
Words 5049
Pages 21
Chapter 3

International Financial Markets

Lecture Outline

Foreign Exchange Market History of Foreign Exchange Foreign Exchange Transactions Foreign Exchange Quotations Interpreting Foreign Exchange Quotations Forward, Futures, and Options Markets

International Money Market

Origins and Development Money Market Interest Rates Among Countries Standardizing Global Bank Regulations

International Credit Market Syndicated Loans Impact of the Credit Crisis on the Credit Market

International Bond Market Eurobond Market Development of Other Bond Markets

International Stock Markets Issuance of Stock in Foreign Markets Issuance of Foreign Stock in the U.S.

Chapter Theme

This chapter identifies and discusses the various international financial markets used by MNCs. These markets facilitate day-to-day operations of MNCs, including foreign exchange transactions, investing in foreign markets, and borrowing in foreign markets.

Topics to Stimulate Class Discussion

1. Why do international financial markets exist?

2. How do banks serve international financial markets?

3. Which international financial markets are most important to a firm that consistently needs short-term funds? What about a firm that needs long-term funds?

POINT/COUNTER-POINT:
Should Firms That Go Public Engage in International Offerings?

POINT: Yes. When a U.S. firm issues stock to the public for the first time in an initial public offering (IPO), it is naturally concerned about whether it can place all of its shares at a reasonable price. It will be able to issue its stock at a higher price by attracting more investors. It will increase its demand by spreading the stock across countries. The higher the price at which it can issue stock, the lower is its cost of using equity capital. It can also establish a global name by spreading stock across countries.…...

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