IB11 - Chapter 11 Haga clic para modificar el estilo de...

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Haga clic para modificar el estilo de subtítulo del patrón Chapter 11 The Global Capital Market
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Introduction The rapid globalization of capital markets facilitates the free flow of money around the world Traditionally, national capital markets have been separated by regulatory barriers Therefore, it was difficult for firms to attract foreign capital Many regulatory barriers fell during the 1980s and 1990s, allowing the global
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Benefits Of The Global Capital Market There are market functions that are shared by both domestic and international capital markets However, global capital markets offer some benefits not found in domestic capital markets
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Generic Capital Market Capital markets bring together investors and borrowers Investors include corporations with surplus cash, individuals, and non-bank financial institutions Borrowers include individuals, companies, and governments Markets makers are the financial service companies that connect investors and borrowers, either directly or indirectly
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Functions Of A Generic Capital Market Figure 11.1: The Main Players in a Generic
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Attractions Of The Global Capital Market Borrowers benefit from: the additional supply of funds global capital markets provide the associated lower cost of capital (the price of borrowing money or the rate of return that borrowers pay investors) The cost of capital is lower in international markets because the pool of investors is much larger than in the domestic capital market
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Attractions Of The Global Capital Market Figure 11.2: Market Liquidity and the Cost of
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Attractions Of The Global Capital Market Investors also benefit from the wider range of investment opportunities in global capital markets that allow them to diversify their portfolios and lower their risks Studies show that fully diversified portfolios are only about 27 percent as risky as individual stocks International portfolio diversification is even less risky because the movements of stock prices across countries are not
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Attractions Of The Global Capital Market Figure 11.3: Risk Reduction through Portfolio
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This note was uploaded on 08/17/2011 for the course BUSL 01342 taught by Professor Jenkins during the Winter '10 term at Ohio University- Athens.

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IB11 - Chapter 11 Haga clic para modificar el estilo de...

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