International Business, 8th Edition

Slides:

Advertisements

Similar presentations

Outline Introduction to the international capital market The players of the ICM Growth of the ICM Offshore banking and offshore currency trading Growth.

Advertisements

The Eurocurrency Market and International Banking

International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

International Financial Markets and Instruments: An Introduction Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin.

International Business Environments & Operations

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 9-1 International Business Environments & Operations 14e Daniels ● Radebaugh ● Sullivan.

©2004 Prentice Hall8-1 Chapter 8: Foreign Exchange and International Financial Markets International Business, 4 th Edition Griffin & Pustay.

Chapter 17. International Business Finance Chapter Objectives Internationalization of business Why foreign exchange rates in two different countries.

International Financial Markets Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall.

Foreign Exchange Chapter 11 Copyright © 2009 South-Western, a division of Cengage Learning. All rights reserved.

Foreign Exchange Foreign Exchange Market Exchange Rate Appreciation/Depreciation Effective Exchange Rate Trade Weighted Dollar Real Exchange Rate Interbank.

Friday the dollar was trading at yen, down from Thursday. Sterling was at $1.7065, down from $ Is the exchange rate quote for the.

International Financial Markets

chapter 8 Foreign Exchange and International

Learning Objectives Discuss the internationalization of business.

Currency dealing: International currency market and activities of the banks.

International Financial Markets Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall.

Copyright © 2011 Pearson Addison-Wesley. All rights reserved. Chapter 10 Exchange Rates and Exchange Rate Systems.

International Financial Markets Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 9.

© Sanjyot Dunung 2011, published by Flat World Knowledge

McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Focus The benefits of the global capital market. Growth of.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 0 Chapter 18 International Aspects of Financial Management.

The International Financial System

CHAPTER 12 INTERNATIONAL MARKETS. Copyright© 2003 John Wiley and Sons, Inc. Foreign Exchange Rates Foreign trade and funds flow must involve a conversion.

Noer Azam Achsani Money Market. Courses Materials Exchange Rates and Exchange Rates System Eurocurrency and International Money Market Covered, Uncovered.

The Eurocurrency Market and International Banking

International Financial Markets

Global Banking and Finance Module

Exchange Market as a Part of International Financial Markets, Participants and Functions of Exchange Market Matúš Czakó Ján Lajda.

Financial Markets and Institutions. Financial Markets Financial markets provide for financial intermediation-- financial savings (Surplus Units) to investment.

Copyright © 2002 Pearson Education, Inc. Slide 16-1 Organization of International Banks International banks provide services to those engaged in international.

Foreign Exchange Market. Chapter Outline Function and Structure of the FOREX Market The Spot Market The Forward Market.

An Overview of the Financial System

Function of Financial Markets

AN OVERVIEW OF THE FINANCIAL SYSTEM

Chapter 2 An Overview of the Financial System. © 2016 Pearson Education, Inc. All rights reserved.2-2 Learning Objectives Compare and contrast direct.

International Financial Markets and Instruments: An Introduction

International Financial System 4 Chapter: IV MKT-305.

MANAGING FOREIGN ECHANGE RISK. FACTORS THAT AFFECT EXCHANGE RATES Interest rate differential net of expected inflation Trading activity in other currencies.

Money and Capital Markets 25 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / IrwinSlides.

International business, 5 th edition chapter 8 foreign exchange and international financial markets.

International Financial Markets. © Prentice Hall, 2006International Business 3e Chapter Chapter Preview Discuss the international capital market.

The Foreign Exchange Market & The Global Capital Market.

International Financial Markets

1 Chapter 2 The Domestic and International Finance Marketplace © 2001 South-Western College Publishing.

Chapter 9 International Financial Markets. © Prentice Hall, 2008International Business 4e Chapter Chapter Preview Discuss the international capital.

Copyright © 2014 Pearson Canada Inc. Chapter 2 AN OVERVIEW OF THE FINANCIAL SYSTEM Mishkin/Serletis The Economics of Money, Banking, and Financial Markets.

Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed.

International Business Finance. Foreign Exchange Markets Participants:- –Banks and other financial institutions –Brokers – intermediaries/ confidential.

International Banking. Description Cross border cross country facet of banking business May not necessarily own or hold a physical presence offshore Traditional.

Financial Markets and Institutions 6th Edition

Chapter 12 The Foreign- Exchange Market. ©2013 Pearson Education, Inc. All rights reserved Topics to be Covered Spot Rates Forward Rates Arbitrage.

International Business Environments & Operations

Chapter 2 An Overview of the Financial System. © 2013 Pearson Education, Inc. All rights reserved.2-2 Function of Financial Markets Perform the essential.

Lecture 3 Foreign Exchange Markets and Exchange Rates.

Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 9-1 Part Four World Financial Environment Chapter Nine Global Foreign Exchange And.

International Financial Markets Chapter Objectives Discuss the purposes, development, and financial centers of the international capital market.

Part 4 World Financial Environment 9-1 Copyright © 2011 Pearson Education.

Economics 2154 Money. Based on Mishkin/Serletis The Economics of Money, Banking, and Financial Markets Fifth Canadian Edition Pearson copyright 2014.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.1 CHAPTER 33 The Market for Foreign Exchange and Risk Control Instruments.

Chapter 2 An Overview of the Financial System

International Financial Market

International Economics

International Business 9e

The Currency Market: Lecture 2

International Financial Management

An Overview of the Financial System

Chapter 9 International Financial Markets

Chapter 2 An Overview of the Financial System

Presentation transcript:

International Business, 8th Edition Griffin & Pustay Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Learning Objectives Describe how demand and supply determine the price of foreign exchange Discuss the role of international banks in the foreign-exchange market Assess the different ways firms can use the spot and forward markets to settle international transactions Summarize the role of arbitrage in the foreign-exchange market Discuss the important aspects of the international capital market Copyright © 2015 Pearson Education, Inc.

The Economics of Foreign Exchange Foreign exchange: a commodity that consists of currencies issued by countries other than one’s own. Price of foreign exchange: set by demand and supply in the marketplace. (given a flexible exchange rate system) Copyright © 2015 Pearson Education, Inc.

The Economics of Foreign Exchange: The Market for Yen Copyright © 2015 Pearson Education, Inc.

The Economics of Foreign Exchange: Foreign Exchange Rate Quotes Direct Exchange Rate (or Direct Quote) Indirect Exchange Rate (or Indirect Quote) Copyright © 2015 Pearson Education, Inc.

Structure of the Foreign Exchange Market: The Role of Banks Major Players International Banks Corporate Treasurers Pension Funds Hedge Funds Insurance Companies Central Banks Treasury Departments International Banks Spread between the Bid and Ask Prices Wholesale Market Retail Market Interbank Transactions Copyright © 2015 Pearson Education, Inc.

Functions of the Foreign Exchange Market Currency Conversion. Currency Hedging. Currency Arbitrage. Currency Speculation. Copyright © 2015 Pearson Education, Inc.

Structure of the Foreign Exchange Market Clients Commercial Customers Exchange-Rate Speculators Currency Arbitrageurs Copyright © 2015 Pearson Education, Inc.

Structure of the Foreign Exchange Market Types of Currencies Convertible/Hard Inconvertible/Soft Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Structure of the Foreign Exchange Market: Hedging Foreign-exchange Risks Spot Market Forward Market Swap Transaction Currency Futures Currency Options Call Option Put Option Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Structure of the Foreign Exchange Market: Arbitrage and the Currency Market Arbitrage of Goods Law of One Price Purchasing Power Parity (PPP) Arbitrage of Money Two-Point/Geographic Arbitrage Three-Point Arbitrage Covered Interest Arbitrage Copyright © 2015 Pearson Education, Inc.

International Capital Market: Major International Banks The international banking system is centered in large money market banks headquartered in the world’s financial centers—Japan, the United States, and the European Union. These banks are involved in international commerce on a global scale (see Table 8.1). Copyright © 2015 Pearson Education, Inc.

International Capital Market Capital market – system that allocates financial resources in the form of debt and equity according to their most efficient uses. International capital market – a network of individuals, companies, financial institutions and government that invest across national boundaries. Copyright © 2015 Pearson Education, Inc.

International Capital Market: Major International Banks Forms services Correspondent Relationship Subsidiary Bank Branch Bank Affiliated Bank Commercial Banking Services Investment Banking Services Copyright © 2015 Pearson Education, Inc.

International Capital Market: Functions. Expands the money supply for borrowers. Reduces the cost of money for borrowers. Reduces risk for lender. Copyright © 2015 Pearson Education, Inc.

International Capital Market: The main components. International Bond Market Eurobond Foreign bond Global bond International Equity Market Factors for the growth in equity market Eurocurrency Market Eurocurrency Euro loan LIBOR Copyright © 2015 Pearson Education, Inc.

International Capital Market: Offshore Financial Centers Political Stability Regulatory Climate Communications Links Other Expertise Copyright © 2015 Pearson Education, Inc.