1. GLOBALIZATION AND THE MULTINATIONAL FIRM
What are Globalization and the multinational firm?
Globalization- allows a multinational corporation
to make a product inone country and sell it in another. This provides jobs inon
e country andless expensive goods inthe other.
Multinational firm- it maintains assets
and/or operations inmore thanone country.
What is Financial Management?
FinancialManagement- refers to the efficient and effective management of
money (funds) in such a manner as to accomplishthe objectives ofthe
organization.
1. Why do we need to study international financial management?
2. What is the difference between international finance and domestic finance?
THREE MAJOR DIMENSIONS SET INTERNATIONAL FINANCE APART
FROM DOMESTIC FINANCE, THEY ARE:
1. Foreign exchange and political risks
2. Market imperfections
3. Expanded opportunity set
ForeignExchange - exchange ofone currency for another or the conversionof
one currency into another currency.
PoliticalRisks - risk that an investment's returns couldsuffer as a result of
politicalchanges or instability in a country.
MarketImperfections - is any market that does not adhere rigidly to perfect
informationflow and provide instantly available buyers andsellers.
