14.Foreign exchange Risk.
16.International Business cycle.
19.International cash management.
21.Methods of payment.
22.Foreign exchange markets.
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
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.
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
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
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.
use is limited.
Unique economic and
Single language or few
Large number of
Different economic and
are the core of the
Limited cultures and
and GAAP principles.
Risks are related to
values, ethics and code of
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
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