4. 14.Foreign exchange Risk.
16.International Business cycle.
19.International cash management.
21.Methods of payment.
22.Foreign exchange markets.
5. DOMESTIC FINANCE
 It is not exposed to
foreign exchange risk
and political risks .
 It is subject to market
imperfections of one
 International finance is
related to cross border
transactions and exposed
to foreign exchange and
 It is very much subject to
because MNC ‘s should
operate in different
6. DOMESTIC FINANCE INTERNATIONAL
 The availability of
portfolio for investment
 It has no scope for
access to global
 It is limited in scope.
 The availability of
portfolios for investment
is wide and large across
the nations in the world.
 The MNC’s venture into
the arena of global
markets and thereby
benefit from an expanded
 It has wider scope.
7.  Money acts as a medium of exchange both in domestic
and international markets as well.
 FE market is a market for converting the currency of
one country in to that of another.
 Without FE market, the international trade and
investment on the scale that we see today would be
impossible and countries would have to resort for
8. 1. Exchange rate risk and its management
2. Foreign exchange market
3. Exchange rate determination and forecasting
4. MNC`s investment decision
5. International working capital management
6. International accounting and taxation
7. International financing decision
8. Macro economic analysis- b/p & external debt
9.  Domestic FM is concerned with raising and utilizing of funds for projects
with positive NPV. The company wants to minimize the cost of capital
and maximize the ROI
 MNC operates in different economic, political, cultural, and tax
 They operate in various product factor markets
 They trade in large number of currencies other than home currency-
assets-liabilities-receivables and payables in different currencies.
 They have easy access to domestic and international capital markets and
access to different markets and instruments
 They are exposed to foreign exchange and political risks in addition to
interest rate and credit risks.
 Investments can be made in different markets, instruments etc. and has
 So financial decisions are more complex than a purely domestic company.
11. DOMESTIC FINANCIAL
 Single currency
 Financial instruments
use is limited.
 Unique economic and
 Single language or few
 Large number of
 Different economic and
 Language differences
are the core of the
12. DOMESTIC FINANCIAL
 Limited cultures and
 Country specific
and GAAP principles.
 Risks are related to
 Multicultural ,different
values, ethics and code of
 Different accounting
standards and GAAP
principles in different
 Multiple risks such as
interest rate risks,currency
risk,political risks etc.
1.Transfer funds from one nation currency to another.
2.Transfer of purchasing power is necessary.
3.Import of food items,petroleum
products,technology,life saving drugs from foreign
4.For availing services like