1、McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-0 International Finance McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1 International Finance Book for Use: International Financial Management Author: Choel S. Sun
2、6th Edition Press: China Machine Press For supplemented material of the book, please access to: http:/ INTERNATIONAL FINANCIAL MANAGEMENT EUN / RESNICK Second Edition 1 1 Globalization and International Finance (Chapter 1) McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All right
3、s reserved. 1-3 Essential Readings P4-19 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-4 Whats Special about “ International Finance”? lForeign Exchange risk and political Risk lMarket Imperfections lExpanded Opportunity McGraw-Hill/Irwin Copyright 2001 b
4、y The McGraw-Hill Companies, Inc. All rights reserved. 1-5 Whats Special about “International” Finance? lForeign Exchange Risk nThe risk that foreign currency profits may evaporate in your home currency due to unanticipated unfavorable exchange rate movements. lPolitical Risk nSovereign governments
5、have the right to regulate the movement of goods, capital, and people across their borders. These laws sometimes change in unexpected ways. McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-6 lMarket Imperfections nLegal restrictions on free movement of goods
6、, people, and money nTransactions costs nShipping costs nTax arbitrage Whats Special about “International” Finance? McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-7 lExpanded Opportunity Set nFirms can locate their production in any country or region of th
7、e world to maximize their profits. nFirms can also raise funds in any capital market where the cost of capital is the lowest. Whats Special about “International” Finance? McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-8 McGraw-Hill/Irwin Copyright 2001 by
8、The McGraw-Hill Companies, Inc. All rights reserved. 1-9 lDeregulation of Financial Markets coupled with lAdvances in Technology have greatly reduced information and transactions costs, which has led to: lFinancial Innovations, such as nCurrency futures and options nMulti-currency bonds nCross-border stock listings nInternational mutual funds Reasons for Rapid Globalization
