International Financial Markets:
The Foreign Exchange Market
Definitions: Let d = domestic ; f = foreign
The foreign exchange rate is the price of one currency
in terms of another.
A direct quote is the number of domestic currency units
Balance of Payments and International
The BOP is a systematic record of all economic
transactions between the residents of the reporting
country and the rest of the world during a given
period of time, usually on
International Monetary System and Theories of
Exchange Rate Determination
International Monetary System
Establishes the rules for valuing and exchanging
Provides mechanisms for correcting imbalances
between a nations intern
International Trade and FDI Theories
International Trade Theories
A number of theories explain why it is beneficial for
a country to engage in international trade.
There are observed patterns of international trade in
the world economy.
Political, Legal and Economic Environments
Managers must establish strategies to manage both the
internal environment of the firm - managers,
employees, shareholders, and the external
environment of the firm - market and non-market.