1、McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserved.1-0 International FinanceLecturer:Fu BoEmail:Tel:13560090601 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserved.1-1International FinanceBook for Use:International Financial Manage
2、mentAuthor:Choel S.Sun6th EditionPress:China Machine PressFor supplemented material of the book,please access to:http:/ INTERNATIONALFINANCIALMANAGEMENTEUN/RESNICKSecond Edition1 1 Globalization and International Finance (Chapter 1)McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.Al
3、l rights reserved.1-3Essential Readings P4-19 McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserved.1-4Whats Special about“International Finance”?lForeign Exchange risk and political RisklMarket ImperfectionslExpanded OpportunityMcGraw-Hill/Irwin Copyright 2001 by The
4、 McGraw-Hill Companies,Inc.All rights reserved.1-5Whats Special about“International”Finance?lForeign Exchange RisknThe risk that foreign currency profits may evaporate in your home currency due to unanticipated unfavorable exchange rate movements.lPolitical RisknSovereign governments have the right
5、to regulate the movement of goods,capital,and people across their borders.These laws sometimes change in unexpected ways.McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserved.1-6lMarket ImperfectionsnLegal restrictions on free movement of goods,people,and moneynTransa
6、ctions costsnShipping costsnTax arbitrageWhats Special about“International”Finance?McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserved.1-7lExpanded Opportunity SetnFirms can locate their production in any country or region of the world to maximize their profits.nFir
7、ms can also raise funds in any capital market where the cost of capital is the lowest.Whats Special about“International”Finance?McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserved.1-8McGraw-Hill/Irwin Copyright 2001 by The McGraw-Hill Companies,Inc.All rights reserv
8、ed.1-9lDeregulation of Financial Markets coupled withlAdvances in Technology have greatly reduced information and transactions costs,which has led to:lFinancial Innovations,such asnCurrency futures and optionsnMulti-currency bondsnCross-border stock listingsnInternational mutual fundsReasons for Rapid Globalization
